# ROLLUP: Prediction Market War | Base Leaves Optimism | Tomasz Exits EF | Clarity Act Lives | Harvard Buys ETH *Author: David Hoffman, Ryan Sean Adams* *Published: Feb 20, 2026* *Source: https://www.bankless.com/podcast/rollup-prediction-market-war-base-leaves-optimism-tomasz-exits-ef-clarity-act-lives-harvard-buys-eth-2* --- Ryan: [0:03] It is the third week of february it is time for the bankless weekly roll up david there's a fight for prediction markets it was hot last week and it just Ryan: [0:13] got even hotter on the week. David: [0:14] Got way spicier a lot of people joining the fight cftc chair mike selig put out a one minute clip on twitter basically planting the flag claiming prediction markets as in the domain of the cftc causing a A ton of people to join and pick sides, senators, representative. Ryan, what side do you think Elizabeth Warren picked? Because she got into the fight too. Ryan: [0:36] Probably not on our side. Let me just say that. I've never seen her on our side. David: [0:40] Which is bullish for us. Ryan: [0:42] Yes, yes. Also, executive director of the Ethereum Foundation, Tamash, one of the co-executive directors, he's leaving after just one year. Why? Why is he leaving, David? And who's going to replace him? What does this mean for Ethereum? David: [0:54] There's also just some alliance changes going on. And base is leaving the Optimism OP stack. They're going and rolling their own Layer 2 code. And then Zora is also launching on Solana, expanding into Solana instead of just being on base. Ryan: [1:10] The alliance is shifting around. That's fascinating. Also, Aave Labs has got a proposal to fix the Aave token. We'll weigh in on that. Also, there's some life in the Clarity Act, David. It just might pass. The odds spiked to about 70% at one point this week, and Brian Armstrong has weighed in. And I've got to tell you about this project that I was looking at in the week. I'm not sure if it is autonomous life on Ethereum or if this is just performance art. We'll talk about the Conway project, all this and more. But before we do, we got some shout outs from our friends and sponsors over at David. Let's check out on prices really quick. Bitcoin price on the week. We up or we down on the seven day? David: [1:49] It's not great. Point nine thousand dollars. But hey, at least we're green. Ethereum 1940. 1940 is priced 1.7% up on the week, but still, anything below $3,000 is bad, actually, and we are below two. Ryan: [2:07] 1940 does not sound like an ETH price. It sounds like a year in my history books. David: [2:12] I remember when ETH price was passing my birth year for the first time. But any time that ETH price is a recognizable year is too low. Ryan: [2:22] Yeah, it's far too low. We need ETH to be in the future. But maybe Harvard is going to get us there, David, okay? Because this was interesting on the week. Harvard, they have a big endowment. This is some of the institutional capital flowing around in crypto. They just sold some of their Bitcoin and purchased some Ether for the first time in the form, of course, of an Ethereum ETF. So they sold 21% of their Bitcoin ETF and rotated that back into an Ethereum ETF. This is their first ETH purchase, about $90 million doing a switcheroo, playing this ratio. David: [2:55] Is this a quantum trade? Ryan: [2:57] Ah, interesting. David: [2:59] I wonder if this is a quantum trade. Ryan: [3:00] I wonder if this is a quantum trade. Quantum FUD. Quantum FUD for Bitcoin. David: [3:03] Which sounds like an incredible movie out of the Star Wars universe, Quantum FUD. It could be. I mean, it seems like it could be. I bet Nick Carter would say, Ryan: [3:15] Would claim it as such. David: [3:16] I bet Nick Carter would say. I do kind of have this hot take that like, you know, ETH is going to get walloped alongside of Bitcoin because Bitcoin is going to take so long to figure out its quantum shenanigans. Yeah. But on the other side of that, quantum might be the best thing to happen to Ethereum in a long time. Ryan: [3:32] It will rise like a phoenix from the ashes, huh? Is that what's happening now? David: [3:36] I think so. I think so. Ryan: [3:38] The total, if you're curious, the total Harvard portfolio is about 1% crypto right now. So they still have a ways they could grow that on both the Bitcoin and Ether side. And maybe they can move down market as well. David, let's talk about this big fight that we were teasing in the intro here. The fight over prediction markets. And maybe we should start with this clip from the new CFTC chair and past Bankless podcast guest. David: [4:03] More notably, past Bankless podcast guest. Ryan: [4:06] Mike Selig. Here he is. Here's what he had to say. CFTC Chairman Mike Selig here. David: [4:11] Over the past year, American prediction markets have been hit with an onslaught of state-led litigation. Ryan: [4:18] In response. David: [4:21] The CFDC has today Ryan: [4:22] Filed a friend-of-the-court brief to defend its exclusive jurisdiction over these derivative markets. Prediction markets aren't new. David: [4:32] The CFDC has Ryan: [4:33] Regulated these markets for over two decades. David: [4:37] They provide useful functions for society by allowing everyday Americans to hedge commercial risks like increases in temperature and energy price spikes, Ryan: [4:48] They also serve as an important check on our news media and our information streams. David: [4:56] Today, the CFTC Ryan: [4:58] Is taking an important step to ensure that these markets have a place here in America and have the integrity and resilience and vibrancy that our derivatives markets deserve. David: [5:10] To those who seek to challenge our authority in this space, let me be clear. We will see you in court. Ryan: [5:19] Wow. Wow. David: [5:20] We'll see you in court. Banger. Banger ending. David: [5:24] Not everyone liked this statement out of the CFTC commissioner, the new CFTC chair. God, it was just a wave of very passionate response from Chris Chrissy. Haven't heard of Chris Chrissy talking about anything for a while, but he came out of the woodwork saying, violating the rights of states who have been regulating sports betting and the rights of states who oppose sports betting is not the purview of another alphabet soup federal agency. Yes, I'm signing up for the rights of all 50 states. Proud of it. So Chris Christie joining the fight against the feds in favor of the states. Elizabeth Warren tweeting out, Trump's CFTC is trying to strip states' authority to regulate gambling within their borders and protect Americans from getting ripped off. A classic Liz Warren line. The CFTC should focus on ensuring our derivative markets don't blow up the economy again, not helping corrupt political insiders cash in. Just really throw in shade left and right. Utah Governor Spencer J. Cox just saying that he's not, that Mike Selig's not being honest, saying, I appreciate you attempting to say this with a straight face, but I don't remember the CFTC having authority over the derivative market of LeBron James rebounds. David: [6:36] Illinois representative Sean Kasson says, you know, the chairman is remiss to not mention the sports betting accounts for 90% of the trading volumes on these platforms. Congress never intended for the CFTC to oversee what is effectively a nationwide sports betting platform, nor to interview with state and tribal governments authority to regulate gambling. So basically... The negative response, all saying that prediction markets are not legitimate financial platforms. Ryan: [7:00] They're just gambling. David: [7:01] They're just gambling and it's just sports volumes. However, of course, there was a plenty of positive response as well. Brian Armstrong came in and said, couldn't be more clear. CFTC has exclusive jurisdiction over prediction markets in the U.S. Senator Bill Haggerty and also Senator Dave McCormick from Pennsylvania both said, gave the thumbs up on the CFTC authority. Tyler Winklevoss joined into the conversation as well. Notably, Brian and Tyler want to have prediction markets in their own platforms and do have prediction markets in their own platforms, so they have a stake in the matter. David: [7:38] And then there are the takes that prediction markets are just gambling platforms. Kyla Scanlon, friend of the pod, has had her on, we've had her on a handful of times, doesn't say anything, just retweets a graph of the categories of volumes being traded. On a call sheet, it is dominantly sports contracts as opposed to other categories. Not true for play market, however. We're going to talk about that in a second. Augustus Dorico, I'm unsure who this is, but they got a pretty viral tweet saying, Brian, you're a legend of the game and I admire you. Retweeting Brian Armstrong's tweet. However, nobody cares if technically a bastardized commission designed to regulate crop futures has the authority to greenlight hyper-efficient predatory frivolous online casinos. prediction markets, as they exist, are evil. And I think this kind of sums up a lot of people's sentiments towards prediction markets. David: [8:28] Yeah, I mean, the rise of sports gambling in the last few years has been significant, and it is, like, it's a common consensus take that sports gambling platforms like DraftKings and these platforms are... A detriment to public health. I don't know if that's my take, but I think that is the consensus take among society inside the United States. Ryan: [8:54] Yeah, but here's the thing. All of the negative responses weren't saying we should get rid of sports betting or sports contract trading. They were basically, it was more like a turf war. They were basically saying the CFTC shouldn't regulate that. And also, I felt like all the negative takes were ignoring the positive things that Mike Selig was talking about, right? which is like, you know, the U.S. Leading on this, keeping media in check. These are information markets, and that's all true, too. So it's all being pushed, smushed together into one monolithic thing. And it seems to me more of a turf war than anything else. David: [9:31] Yeah, yeah, I agree with that. It also ignores the fact that, like, predation market platforms are a market rather than a book model. That's right. Ryan: [9:42] Which is already an improvement. David: [9:43] Which is fundamentally a huge improvement. And it does change the legal nature of what prediction markets are. There are, of course, people who came into the conversation saying that, you know, prediction markets are true and novel financial instruments that provide value to the world. There's this study that came out that Kalshi was more accurate on predicting Fed fund futures than any other any other platform or any other prediction. Uh nick tomano which was the tweet that i think should be uh the most notable by people who think that these are just prediction market or sports gambling platforms nick tweeted out how you know the predominant most highest volume markets poly markets are all either elections federal reserve questions or you know geopolitics sure yeah Ryan: [10:31] But a lot of people don't even want those. Do you remember, I mean, obviously, it was just over a year ago when Shane Copeland, the CEO of Polymarket, was just like raided by the feds. And do you recall, previous to that, letters that senators like Elizabeth Warren wrote about prohibiting political markets on prediction markets, right? They don't like the other categories either, is my point. I don't think they like prediction markets or maybe just like markets as a category. It goes back to the conversation we've been having on Bankless about this controversy is if you like markets and you sort of respect them, then you see a place for regulated prediction markets that are free and fair and open, permissionless to everyone. If you don't like markets, you see all of this as bad. Yeah. You know, intermixed with that, there's a whole cloud of incentives, I think, coming up the works. David: [11:23] Yeah. A lot of the politicians like Elizabeth Warren especially always has this bend towards authoritarian control. At least that's how I always interpret a lot of her tweets. And so it makes sense that she doesn't feel comfortable with prediction markets about elections. And she doesn't talk about the value of a check on our media institutions because media institutions and government can frequently go hand in hand. And she doesn't want that to be out of the control. Ryan: [11:50] Yeah. David: [11:51] Out of control. She doesn't want that out of the box. Ryan: [11:54] A little too bottom up. David: [11:56] Yeah. There's one nuance, an unfortunate nuance that really conflates and makes this difficult to argue in Capitol Hill, which is that Donald Trump Jr. And a lot of the Trump family are either advisors in or have meaningful investments in both Kalshi and Polly Market. And so the newly appointed Trump CFTC commissioner, Mike Selig, is trying to regulate these prediction markets in the most expansive way possible, allowing these things to become the best versions of themselves. And the claims of corruption of the Trump family and their control over the governance of the United States is like, well, now they're also exposed. They have exposure in prediction markets. And so that really makes it difficult to argue about the merits of these things when there is also the whole Trump involvement in the business side of things. Ryan: [12:50] Yeah, it's a lot to untangle here. One thing that does seem pretty clear about the future, though, is prediction markets and AI is product market fit. And we're starting to see that. So this is an account on Twitter, Polymarket History. Clodbot started printing $40,000 in a day. Just look at this. I think this is about Polymarket's new sort of five minute Bitcoin and crypto asset trading feature that they've added. And when you set a Clodbot loose on this thing, if it's smart and if it makes intelligent trades, it can actually generate funds directly to a crypto wallet using these prediction markets and using truth markets. And you got to think that this is just the start of AI plus crypto. In fact, you tweeted something out, David, where you think AI plus prediction markets and arbitragers and market makers mean that we will essentially have something close to perfect truth. Maybe that's a little bit of a hyperbole. I mean, perfect truth. What is that? But it is for these types of events, it's the closest you can get, right? A market stake weighted outcome that has incentivized actors. I mean, that does lead to incredible information for the world. It's like much more accurate than most media out there. David: [14:11] Yeah. I mean, what is AI fundamentally is just a pattern recognition tool. And as AI models are getting more and more capable, they can ingest more information, they can connect more dots, they can do it faster and more comprehensively than any other tool that we've ever had before. And the crypto and prediction market side of things give these AI models the agency they need to have to actually impart change upon the world in the prediction market form factor. And so all of the knowledge, what do we know about prices as like a core primitive of markets? Prices are information. AI, with arbitraging and market making, allow the knowledge of the world that they have on the internet to show up in prediction market prices. David: [14:56] And that is extremely cool. That is very sci-fi. And it is a new media institution that has nothing to do with journalists or written text or anything. And that is a value to society that is worth preserving. Ryan: [15:12] I completely agree. Yeah, it's a new consensus-like truth-finding mechanism, isn't it? Although there is also some pushback in AI corners. So we just mentioned OpenClaw and using these prediction markets. But I don't know if you caught this, David. So there's a Lex Friedman conversation. I haven't listened to the full interview, but I did listen to this part. The founder of OpenClaw, his name is Peter Steinberger. Of course, OpenClaw is this open source, you know, personal agent type of project that has spread like wildfire. He actually talked about crypto in his interview with Lex Friedman. And he said this about crypto. I didn't know that they're not just good at harassment. They are also really good at using scripts and tools. I underestimated these people. Honestly, I was this close to just deleting my project, he said. Basically, he was talking about all of the harassment that he felt he received from, I'll put this in air quotes, the crypto community, that were trying to front run him. Anytime he would make a name change to the OpenClaw project, they were like registering domains and spinning up meme coins and trying to get him to claim them, spamming the Discord, just... Ryan: [16:25] Out and out kind of harassing him or front running all of the things that he was trying to do. And it was deeply frustrating to Peter. And he kind of pointed the blame at crypto for this speculative fervor, you know, token, trying to tokenize everything for these shenanigans. And you understand kind of why he feels that way at some level. But like, I mean, is that really crypto? Ryan: [16:49] Like, I guess there's an element of crypto there. There's sort of a, I mean, like, What do you think of that? What did you think when you heard his criticism? David: [16:57] Yeah. And listening to the Lex podcast, it went on. The section about the crypto harassment, it was like 15 minutes, but then it would also like reoccur, you know, every 15 minutes for a while. And then the crypto people came in and effed it up again. And so it was inescapable listening to that podcast. And I think it is just a sign of what rest of society thinks about crypto. Like we've talked about this before on recent episodes crypto PR is the worst that it's ever been Ryan: [17:27] By far not. David: [17:29] Even close with like the Donald Trump grift campaigns and just like stuff like this going out on Lex Friedman we have never been in a deeper hole as an industry as it Ryan: [17:38] Relates to PR so here's a take from someone in crypto we really have attracted us from the worst people to crypto that completely took over our narrative it's all toxic extractive greedy or straight up scamming to outsiders okay it's like I'm in crypto I'm not involved in any of that. David: [17:51] Like, so are you. Are we the minority? Ryan: [17:56] I don't know. I mean, can you blame, I mean, who is doing this? Like, bot farms? Like, we have no idea who's actually doing this front-running type of behavior. David: [18:08] It's probably a smaller number of people who are very loud and very aggressive because they are trying. And very organized. And they understand the value of being on the forefront of something because they can meme coin it and capture the value that way. Ryan: [18:21] And they are also simple attacking it. So you don't know how many, like, well, like which humans actually underlie that. But maybe to the point there is kind of a deeper, do you think there's a deeper cultural rot here? I guess that's what this, you know, this poster is saying. We've attracted the worst people. You know, we need to look at ourselves in the mirror type of thing. David: [18:41] I mean, it's not like we can like look back on crypto and say that we have the most above board people. Behavior in the industry. It's, yeah, it's not great. Ryan: [18:56] Here's the shame from my perspective. Open Claw, because it's open source, because it's basically the ability to run self-sovereign AI. You can run it locally. You can wire it up to models. You can set it free with command line interfaces. It is tailor fit for a crypto world of smart contracts and on-chain transactions. It's just like perfect product market fit. It really is. And to have the founder of that project just have a visceral reaction to crypto because, you know, a whole bunch of people are trying to front run him and, Ryan: [19:27] you know, do the specular thing and do the meme coin grift rug pull type thing. It just kind of sucks. But I do think no matter what happens, I think that AI developers and some of these AI agents will come full circle to crypto, start building on it, realize that it is just incredibly useful for property rights and agent-to-agent transactions, that it will be inevitable. It's just the PR that we have is kind of a barrier to that right now. David: [19:58] Yeah. I saw a take that was once again surfacing the take of just like, why can't agents use credit cards? And agents can use credit cards, but you know what they can't do? They cannot receive credit card transactions. And so if they want to receive, if they want to sell their service to another agent, they need to use crypto because they will not be able to sign up for a merchant account and have their own point of sale. Ryan: [20:24] It is that, and it's not just that. So there's another point in the interview with Peter on Lex that he talks about why he did everything with OpenClaw and CLI, like command line interface, right? Which is just basically deep in the operating system. And he lets it free rather than MCP, which is kind of like almost like an API type tool. And it's because when you are at the command line, you are like... You have the power tools. You let the AI, it's completely unleashed in sort of, you know, the deepest way possible. And that's what you get with crypto. You can't get that with a Stripe API. Okay. Like you can't get the level of integration. It's permissionless. It's permissionless and it's completely AI native. And you won't be able to get that with any kind of API or Stripe interface or credit card. David: [21:10] AI will never, ever F up a copy and pasting of an address. They will never do that. They will always send successful transactions. Ryan: [21:17] Yeah. AI will prefer crypto. And I think we'll see that before long. We got a lot more to talk about. Base leaving Optimism. Why? And are they setting up to leave Ethereum too? David: [21:27] No, don't say it. Ryan: [21:29] Also, one year in, Timash is handing the torch to a new executive director, co-executive director at the Ethereum Foundation. Who is this person? And will the EF reforms that he put in, will they persist? Or will the EF backslide? We'll talk about all that and more. But before we do, we want to thank the sponsors that made this possible. David: [21:45] Back in February of 2023, BASE announced their BASE chain, their OP stack layer two. And it was a huge win for Ethereum because Coinbase building a chain on Ethereum, building a layer two on Ethereum was very validating of the layer two roadmap. And it was also very validating for the OP stack tech stack, which then proliferated across the ecosystem. Everyone started building a chain on the OP stack. Ryan: [22:11] It's safe to say it's set like a meta for crypto, wouldn't you say? David: [22:13] It was set a very healthy meta for crypto and a lot of people trend followed this. So like, oh, we're going to do our OP stack chain too. David: [22:22] Today, this week, February 18th, base has announced they are leaving the OP stack, tech stack, for their own native unified stack for base chain. Why are they doing this? What they claimed, there's what they said they're doing and why they said they're doing it. And then there's, you know, the other reasons that we can speculate on. The claimed reasons is that they want more control over their ability to ship upgrades to their own tech stack. David: [22:46] There were other things in the OP stack that they didn't really care about. They weren't really concerned with. So whatever, they kind of shut it. Then they just want, you know, the autonomy. They just want the control. And that was what their broad strokes of their objectives were. What wasn't stated, but perhaps very likely, is that being a part of the OP stack super chain, which they agreed to when they announced the OP stack chain, they agreed to rev sharing. Two years of rev sharing with the super chain, where they had to give, I think, 10% or 15% of their chain fees to the Optimism Collective. Over those two years, that is $16.5 million of Ether at today's price. $42 million of Ether, collectively, had they sold the Ether in the moment that they collected it. So because Ether price is down, the revenue went down. And so that contract, that phase of the contract is up. And so they are leaving the super chain and leaving the OP stack tech stack to potentially just not give away these super chain fees. Ryan: [23:45] But they're kind of forking it too, right? They're taking the OP stack technology and a lot of that's open source and they're just forking their own version of that. That's going to be more supported by base and not necessarily compatible with the OP forks moving forward. David: [23:58] Correct. As I understand it, the base tech stack is like 99% recycled code from the OP tech stack. Ryan: [24:06] Okay. Okay. But presumably it's going to be a little bit different. And so all of that revenue that they were paying OP in the super chain stack, that was 97% of total super chain revenue. David: [24:19] Of all super chain revenue. Yeah. Basically, the super chain was just base. And it's like if the state of california represented 97 of the american economy but they also were paying for everyone else's like welfare and then all of a sudden california's like you know what Ryan: [24:36] We're gonna be our own. David: [24:38] Country we're gonna become our own country we're done here yeah Ryan: [24:42] Now now base is still a layer two and you know they talked about that But, you know, so they didn't say that they were leaving the layer two ecosystem. They didn't even imply that. Or did they? Some people are interpreting that there's something here that might imply in the future base is carving out some space for them to become their own, say, tempo style EVM layer one. One of them is an argument from Gabe Shapiro, a crypto lawyer. What does he say? David: [25:14] Yeah, he's saying that there are a few things in the announcement in the blog post that really emphasize... What would be in a layer one, mainly client diversity and decentralizing the sequencer. These are, well, you can do all of these things as a layer two. Everyone kind of agrees that these are just like layer one ish things to do, especially decentralizing the sequencer. And so Gabe tweets out, am I reading this blog wrong as base signaling is unlikely to become a stage two roll up and is more likely to become layer one like creating its own decentralization and economic security. rather than needing to borrow Ethereum's. Alex Thorne had a follow-up take that is pretty similar to this. He thinks, he speculates that Coinbase might have decided that base isn't decentralized enough to avoid registration as an exchange for tokenized stocks. So base, because it's operated by Coinbase, it's SQL sequencer layer two, too centralized to become a decentralized exchange for stocks. Ryan: [26:15] Specifically in the Clarity Act, right? David: [26:17] In the Clarity Act, yeah. And so the Clarity Act defines a non-decentralized finance trading protocol. It defines what that is. And Coinbase, he speculates that Coinbase thinks that David: [26:27] like base needs to be more decentralized in order to not fit that category. Ryan: [26:31] And my understanding is they could get there by decentralizing their sequencer rather than that being base run. But at the point that you decentralize your sequencer, right? The question is like, well, you have to start incenting other sequencers outside of Coinbase with some sort of token, you know, staking. And then maybe you just do the whole consensus layer as well. I think that's some of the logic here, which is like, I mean, what's the point really in being a stage one rollup at that point? You may as well just decentralize everything and like so-called decentralize everything in air quotes, which means like run your own consensus layer and do kind of the tempo playbook. He continues, he said, I wonder what Coinbase will do here. Either go with the Kraken approach and Kraken is pursuing based rollups for ink. Okay. So that means basically Ethereum layer one will be the decentralized sequencer layer. and that passes all the tests for decentralization. Or they could roll their own layer one and create a validator set and go the tempo, canton, you know, circle arc approach. So that's what the speculation here is. Now, I will say that everybody within base, if you ask them, including Jesse, will be like, no, we're 100% Ethereum. We're continuing to do this layer two. So a lot of this is speculation. Yeah. But I don't know. I mean, you could see it happening, I suppose. David: [27:53] It's not an incoherent thought process to come to that conclusion. Like, all the kind of puzzle pieces are there. Optimism, the OP sentiment down 20%. It kind of makes sense. Ryan: [28:04] The OP token, you mean? David: [28:05] The OP token, yeah. But let's see, what's the fully delivered evaluation? $600 million FDV in OP, down from incredible highs from years and years ago. Ryan: [28:16] Actually, brutal. brutal so the highs uh that we hit in march 2024 for op optimism 4.5 billion okay fdv now it's 600 million fdv um this is also taking a toll on other layer twos as well right which arbitrum for instance trading at uh 600 billion no one billion fdv okay yeah one billion fdv and so you have to wonder, how does this affect Layer 2s and their valuation? Will they need to start generating fees on their own? It's actually notable. I know not technically kind of a Layer 2 in the, you know, the L2B sense of things, but Polygon is an EVM, kind of a sidechain-based approach. And just this week, they started generating more fees than Ethereum, okay? Including actually the cost to use Polygon was higher on a per transaction basis than Ethereum. David: [29:17] Is that anything to do with all the bots trading on Polymarket, which is on Polygon? Ryan: [29:22] It is. It is Polygon getting, Polymarket getting all of this activity. Of course, Polymarket is on Polygon. So it is receiving some of the benefits of this from a revenue perspective. So pretty crazy here. And you also see Polygon actually holding up. So $1.1 billion in market cap. David: [29:42] The token price isn't amazing, but like you said, it could be worse. I think one of the reasons why the Optimism token is so uniquely down versus Arbitrum and Polygon is because Optimism made a specific bet of Ethereum equivalents. And to me, Optimism was a concentrated microcosm on a specific roadmap of Ethereum's Layer 2-centric roadmap, app which Vitalik just tweeted out it doesn't make sense anymore Ryan: [30:09] Yeah it's and it's not only that I think they have benefited the base chain more than the op mainnet chain because let's not forget optimism has what the third largest uh layer two by tbl something like that um but rather than accrue more apps and state right and value there a lot of that has shifted to the base chain and the base chain is like oh right yoink we'll take that see you later optimism. David: [30:35] Was specifically trying to produce the super chain and it was like you know minimize the op mainnet produce the super chain cohere all of the chains and that's what optimism is which is very similar to the ethereum roadmap it didn't work for ethereum it also didn't work for optimism Ryan: [30:49] I think it's an end of an era i think it's the end of the the super chain era i think it's much more of a you know doggy dog world where you know every chain is defined by the strength of his chain and sort of these alliances are funny. Yes. David: [31:02] Wait a second. Ryan: [31:03] Ray Dalio-ing the chains. This is John Mersheimer. David: [31:06] Oh my God. This is called chain realism, Ryan: [31:07] David. David: [31:08] Which chains have the power? Oh my God. Ryan: [31:11] Yeah, power dynamics. Oh, excuse me. Power dynamics at play for sure. Although I will say, a win for Optimism on the week. EtherFi is migrating to Optimism. So they're going to the OP mainnet. David: [31:23] That's crazy. Ryan: [31:23] So there you go. David: [31:24] All right, all right. That's a solid win. That's a solid win. Ryan: [31:27] Well, base launch a token is down, actually. So the probability base launching a token is down on Polymarchment. David: [31:32] Yeah, by June 30th of this year or December 31st of this year, down 37% and 16% respectively. If they were going to launch a layer one, I would expect them to launch a token sooner, not later. Ryan: [31:45] Yeah, and we'll be watching that chart on Polymarket because that'll be revealing. Also, in the world of changing alliances, do you remember Zora creator chain on base? They were sort of a favored child of base. Yeah, it was the creator tokens. David: [32:02] The creator economy. Just coin it, coin the content. Ryan: [32:05] Just coin it, just coin it. Really cool app, if you're into that type of thing. Well, they are creating an attention market, a decentralized exchange attention market on Solana now rather than base. So they're keeping their old app and all the creator economy stuff on base. But in parallel, they are launching something new on Solana. This almost looks like a pumped off fund style meme coin trend type of market. I haven't fully dug into what this is, but it is notable that it's on Solana rather than base. David: [32:39] Yeah. Yeah. That's where all trends get tokenized into meme coins. So it kind of makes sense there. It seems to be they're making like what seems to be baskets of things that are related to each other in pop culture. And then those are, you can buy the trend. Ryan: [32:54] Like the Epstein basket or something like that? What are you buying? David: [32:57] I don't know if I'm buying that basket. Ryan: [32:59] Are you selling it? It's whatever's trending, right? Yeah. David: [33:02] Yeah. But it seems to be like a collection of tickers inside of a single trend. And you can buy the collection. I think that's how that works. I need to read up on it more. Don't quote me. Ryan: [33:12] Are base people feeling betrayed? Have you seen some of the chatter about this? David: [33:16] No, I have not been paying attention to this. I mean, like, I don't know, there are some of my favorite apps are multi-chain, like Matcha, for example, is on both Solana and all EVM chains. And apps just ought to be chain agnostic. They should just go where the apps make sense. Ryan: [33:33] Well, it's interesting. Zora is pivoting more towards, you know, Solana in some ways, which is a user base that just loves this stuff, right? But at the same time, Coinbase is kind of pivoting away from Zora and creator economy activity. We've been talking about the Coinbase wallet future. This was a coin shareholder that said, I'm deeply concerned about how the base app was marketed and executed. And he's talking about the previous paradigm where it was sort of a creator social app experiment, like Farcaster meets Zora. and that was all embedded in the base app. David: [34:05] It was like a social network meets on-chain finance. Ryan: [34:07] Yes, you know, Web3 social, all of that. Coinbase has since pivoted and the new update of the wallet is a little bit different. Brian Armstrong actually responded to this purported shareholder. He said, If you want to fire someone, I'll take ownership if you want to fire someone. This is all in the rearview mirror. What we are focusing now on is a self-custody wallet. So he's basically saying the plan is to take everything that has been in Coinbase and done in a custodial way and move that into the base app and provide a way to do this in a self-custody type basis. And that was kind of what Hayden Adams was getting at here. He said, Base App is now focused on being the self-custodial version of Coinbase. He took that quote from Brian Armstrong, and he said he really liked that. And that seems to be where Brian is taking the Base App, which is you have all of the functions in Coinbase, all of the money verbs in a custodial way. You have the ability to buy. You have the ability to stake. You have the ability to sell. You have the ability to do loans, borrow and lend against loans. Well, the base app is now taking all of that functionality and doing it DeFi mullet style in a self-custodial version. I think that's kind of what people want. David: [35:22] Is that what Hayden is saying? I thought Hayden saying like the main user experience of Coinbase ought to be the self-custodial version of Coinbase. Ryan: [35:32] Ah, yeah. I mean, Hayden's taking... David: [35:35] He's going even more extreme. Ryan: [35:36] He's going even more extreme. David: [35:38] So like what pull does the base app have If it's just the non-custodial version of Coinbase, what pull does it have to, you know, the average, otherwise bankless, indifferent person? Like, they don't want the non-custodial version. They want the custodial version. They don't? Ryan: [35:54] Why not? David: [35:56] Because UX is better. The UX is better on the non-custodial version? I think that's for enthusiasts like you and me. Ryan: [36:02] Yeah, I suppose. Yeah, I do think you can at least reach parity with the custodial version. Hopefully. Don't you think? And we're getting closer to that. David: [36:10] Yeah. Ryan: [36:11] Yeah, maybe there's other reasons to go, Self-custody as well. David: [36:16] Yeah. Overall, I do think that this is kind of just like another nail in the coffin that needs to be reborn, but just on-chain activities, down bad. Ryan: [36:25] Or financial? David: [36:26] Right now. Oh, down bad. Non-financial on-chain activities, down bad. Anyways, moving on. Tamash, the new Ethereum co-executive director, is now the old Ethereum co-executive director. He is leaving the EF. He announced that he is leaving his role at the end of February. And I've talked to some people at Denver. I've talked to some, you know, EF people, the broad strokes of this is that Tomas came to the EF to turn the EF around. He did that job. He could stay there, but it would basically be marginal. So I think he's more or less kind of saying job done, job well done. Ryan: [37:06] Mission accomplished. David: [37:07] Mission accomplished. And also, like everyone knows, Tomas is just a serial entrepreneur. Tomas is a builder. He wants to go build things. And reading between the lines, I think he sees the very big world of AI. And he wants to go be an AI entrepreneur. I think the most likely thing is that he does some intersection between Ethereum and AI. He goes and puts AI on chain. And I think he just has that itch that he needs to scratch. And so a bunch of people gave him the credit. Congratulations and the thanks. Vitalik tweeted out, in his year at the EF, Timash helped greatly increase the efficiency of many parts of the foundation and turn the EF into an organization that is much more responsive to the world outside. Banger, banger. That's exactly what we needed. Ryan: [37:50] I hope it was amicable. I think it was. I thought we'd get two years out of Timash, and so I was a little surprised that we only got one. David: [37:57] He did two years in one, dude. Ryan: [37:59] Really? Is that the story? When I saw it, I was like, okay, is the EF autoimmune system just kind of spitting him out? It doesn't seem like that. David: [38:07] It doesn't seem like that. Again, I've talked to people at the EF and also at E-Dember, and it doesn't appear to be like that. Ryan: [38:13] Who's taking over? Who's going to be the new co-executive director? David: [38:17] And an individual named Bashan Aue, A-U-E is how you spell that, will be the new co-ED alongside Xiaowei, who will be remaining. Bashan was already in the core management team of the EF. He's already worked with the co-EDs on high-level decisions. And so it seems to be the logical person to step up into their role. Ryan: [38:38] Yeah, a lot of people are talking, like I've never heard of him, but a lot of people are saying he was kind of a best kept secret in the EF. You know, Danny Ryan thinks very highly of him. Vitalik obviously is speaking well of him. Many have spoken well of him as kind of an inside force, but he hasn't had a loud external presence as of yet. David: [38:55] Yeah, he does have a Milady PFP. Ryan: [38:58] Okay, is that credibility? Don't you have one of those? Could you be the EF director? David: [39:03] I do not. If I put on a Milady PFP, I think the price would go down. Ryan: [39:08] David could be the next EF director, man. If you want that, leave it in the comments. David: [39:12] No, no, no, no, no, no, no, no, no, no, no. Ryan: [39:15] We got more to talk about. There's signs of life for the Clarity Act, David. Maybe the bull market's not out of sight yet. Maybe we could get it back. Also, a token alignment proposal. Go fix the Aave token. This is pretty exciting. Ryan: [39:26] And I want to tell you about a project. It's called the Conway Project. Is this the world's first autonomous life form on Ethereum? I don't know. We'll talk about all that and more. And thanks to the sponsors that made this possible. We have signs of life for the Clarity Act, or as Brian Armstrong calls it, the market structure bill. Here's Brian Armstrong being asked about it in an interview this week. We're here meeting with crypto companies, bank representatives and senators as well to see if we can get to a solution on market structure. And one of the big issues that did come up in the past was this idea of stable coins on rewards. I wouldn't say we blocked it. In fact, nobody, I think, in the crypto space has been working harder on this over the last few years to try to get some legislation. What we did say was the current draft, we had some issues with it. I think that caused everyone to come back to the table. And there's now a path forward where we can get a win-win-win outcome here. Win for the crypto industry, a win for the banks, and a win for the American consumer to get President Trump's crypto agenda through to the finish line so we can make America the crypto capital of the world. So what do you think that is? You think that win-win-win, does that include, are we going to get interest on our stable coin yield, do you think? I think that's what he means. David: [40:32] I don't think he would be so smiley and happy if it meant that we are not able to get yield on our stablecoins. Ryan: [40:40] Really? You don't think he has been maybe browbeaten by everyone else who was like, Brian, stop holding this up. David: [40:46] Oh, and you think he's just doing a safe face? He's like, it's a win-win-win. And it's actually, no, he actually just capitulated. Ryan: [40:51] Maybe something marginal. Maybe some capitulation. Or maybe Brian Armstrong did bring back yield to stablecoins. That would be incredible. David: [41:00] It has to be some compromise. I guess we won't know what he's talking about until we just hear more chatter about it and we see the new versions of the Clarity Act. But wow, that is a good looking poly market. 83% chance Clarity Act signed into law in 2026. That's great. Ryan: [41:18] You know, this is an insider market here. I mean, people are people who know are probably. David: [41:22] You know, I don't think we should use the word insider. Ryan: [41:27] Because insider a dirty word. David: [41:30] I don't know. I just don't think it's accurate. Ryan: [41:33] Somebody who knows, somebody who has specialized knowledge, somebody who has more knowledge than you or I. David: [41:39] Who have knowledge about the state of the bill is in the hundreds of people. Ryan: [41:46] Could be staffers. David: [41:47] Could be lobbyists. Ryan: [41:49] Could be independent researchers who are just tracking this very well. David: [41:52] It's enough for it to be just like, yeah, maybe you and I don't have knowledge about it, But like there's enough people out there. Ryan: [42:00] Informed market participants, David. David: [42:02] Yeah, there we go. People in the know. People in the know are buying. Ryan: [42:07] You know, that same interview, Brian Armstrong was asked about quantum. I know this is on your mind lately, David. Here's what he said. One thing I've heard is that quantum is going to break the blockchain. Is that true? No, that's not true. I think that's a very solvable issue. And actually, Coinbase has been very front footed on this. We put together a quantum advisory council and we're in regular contact with the major blockchains about a path to upgrade to a post quantum cryptography world. So we're going to stay engaged on that. And I think it's very solvable. I love that quantum is going to break the blockchain. Just one blockchain is going to break it. David: [42:39] He said that they are in touch with the major blockchains. Who do you think they're talking to on the Bitcoin side? Who do you think that is? Ryan: [42:45] I don't know, but you know, this does give me some confidence that if Bitcoin Core doesn't solve it, Bitcoin devs don't solve it, you know, Coinbase could swoop in. David: [42:54] Yeah. Right? That would piss them off. Would that? They wouldn't like that. Ryan: [42:58] It's going to be an interesting future, but it is a solvable problem. You just have to, like, somebody has to step up and go do it. And actually, it is a solvable problem, but you still have all of this Bitcoin supply that's in the old Satoshi addresses, right? What, like three to four million Bitcoin? Oh, yeah. What do you do with that? David: [43:15] So, yeah, even if Bitcoin does, you know, upgrade his signatures and everyone with the Bitcoins move into a new wallet, the old Satoshi coins are still fundamentally at risk. Ryan: [43:26] Unless he wakes up and goes and moves them to quantum safe addresses. David: [43:30] I mean, that's not that's not happening. Ryan: [43:31] There's something that's going to happen. Like you can't. David: [43:34] Oh, those are getting yoinked no matter what. Ryan: [43:36] Whatever. Yeah. Something's going to happen to them. or you nerf their property rights and you say this is burnt now or something has to happen. David: [43:46] Oh, God, that's so scary. Ryan: [43:48] I know. It's a little long for an answer to a question, like, you know, that interview question. David: [43:54] He can't get that in a 60-second stoplight. Ryan: [43:55] He can't fit that in. But maybe that's why Harvard is, you know, diversifying to ETH. Hey, you know what's really cool here is some of the institutions buying DeFi tokens lately. I think it was, was it last week, BlackRock bought the UniToken. It's really cool. And formed a partnership with Uniswap. This week, Apollo is buying Morpho. Do you know who Apollo is, David? David: [44:17] I know it's big. Ryan: [44:18] Private credit, absolutely massive, absolutely huge. It's a whole industry. Apollo is one of the leaders in this sector. And they are buying $90 million, up to 90 million more so tokens. David: [44:32] They can buy up to 90 million. Okay, so I need help understanding this. Yes. So the Apollo Global Management is teaming up with the Morpher Association with this agreement that allows them to, they can buy up to 90 million Morpho tokens, 9% of the supply over four years. And they can buy the token through open market buys or private deals. Why do you need an agreement to have the option to buy Morpho tokens on the open market? Ryan: [45:01] I don't know. David: [45:02] I don't really get it. Ryan: [45:03] You were like, oh, that was always available to you. David: [45:05] There's always an option. There's always an option. I can buy, if I want to, up to $90 million of Morpho tokens. Ryan: [45:13] It's not $90 million, I should say. It's $150 million, $90 million of Morpho tokens. Yeah. There must be more to it. It must be some sort of option at a fixed price or something. David: [45:22] Yeah, I think maybe they are just negotiating for, like, they're protecting themselves. So, like, when we buy these tokens, we get a seat at the table, which, like, maybe the token doesn't explicitly say that, but this agreement does. Yes. Something like this. But, like, the wording is kind of interesting. Ryan: [45:39] So, they get a say. If they did this, 9%, they'd get a say in governance and protocol decisions. And they'd be in a better position with respect to DeFi credit. And, of course, they get the upside in the Morpho token. What I'm excited about is the problem we've had with our lemon type tokens is they haven't had good investor protections. And you know, if BlackRock gets involved with the UNI token, if Apollo gets involved with the Morpho token, as these large institutions get involved with these assets, they are going to demand alignment and greater investor protection, and they're going to help mature the asset class. I think that's the bull case, that what we're seeing actually here is the maturing of our DeFi tokens. And I think this is an underrated thing that's happening in the bear market, right? Like, we might come out of this in a couple of year time and be like, oh, man, Aave, Uni, Morpho, those are buys. Remember when BlackRock was just getting in during the bear market? David: [46:36] And we ignored it. I mean yeah it is it is a passing of an acid test of if Blackrock or Apollo thinks that your token is investable Then then your token is investable because they put all of the lawyers on that to look at that. Ryan: [46:54] That's right. And they're going to make it so that it is more investable over time. Speaking of which, the Aave token has had some alignment issues between Labs and the Aave DAO. And there was a proposal put out last week to resolve this. David: [47:09] Yeah, that's right. So Aave Labs put out a proposal, just a temp check. So it's like, hey, temp check. How do you guys feel about this? It's not a final proposal. So now the discussion period has started. Just the big headline change is that Aave Labs is offering to sell the Aave DAO, all Aave branded product revenue to the DAO, including the fees from the Aave.com interface for a steep price, Ryan, of $42.5 million and 75,000 Aave tokens, which is about worth $9 million. And so what labs will give to the DAO, they will give them the Aave.com interface fees, the Aave app, the Aave card, Aave Pro, which is V4, the Aave kit, Aave Horizon, basically anything branded Aave that makes revenue, they give that to the DAO. The swap integration, which is where this whole conversation got started, it's currently making about $10 million annualized. That would go to the DAO. And in exchange, Labs wants to be funded by the DAO for continuing to develop Aave, plus the $75,000 Aave, plus the $42.5 million in stablecoins conditional on milestones. So kind of a steep price, but this is the offer that Labs is making to the DAO to put everything together under one unified thing. Ryan: [48:30] Yeah. What do you think? Some investors like it. So Felipe, he's been a critic of many DeFi tokens. He said, this is a fantastic proposal, better than my upside case. It does everything I would want from a token holder perspective. It aligns all existing and future revenue behind the Aave token while giving the team the funds and flexibility to compete. Okay. So he likes it. I've seen, this is much better than the status quo, okay? Another stakeholder, though, is sort of the de facto leader of the Aave DAO, which is Mark Zeller. And he has some criticism about this. I think that, you know, he said the stablecoin ask alone, that's 42% of the DAO's existing treasury. So it's a steep ask. And it's like giving a lot of power to one specific group. It's putting all the eggs in the Aave Labs basket. Maybe, you know, the DAO would want this more distributed. So he thinks it's bad to lump together the votes for the revenue, V4 and the foundation, the $50 million in funding. I don't know. He's probably, I think I'm sympathetic to that argument as well. But this is a step forward. Maybe they negotiate. Maybe they hash it out. One question I have, though, in general is like, does this solve it permanently? Or the next time Aave Labs spins up some sort of revenue stream or product for Aave, does you have to have this negotiation all over again? You know what I mean? David: [49:52] Yeah, what if Aave Labs just builds another product and they Ryan: [49:55] Keep it for themselves? We'll far rather collapse the, I guess, ledger of equity and upside into one entity and have that entity be sort of the token, if that makes sense. So this is a good step forward, definitely much more alignment, but I don't know if it's permanent alignment. Anyway, Aave Price seemed to like it, I think. David: [50:17] Aave Price is flat, and it's actually kind of just like down bigly since this whole drama took hold in this conversation. But man, I think Aave price just looks good here. It's $123. That is a $2 billion market cap. It's down bad over the last nine months or so. If this is the necessary tough conversation for Aave to come together and be unified, I think Aave kind of looks good here. Ryan: [50:47] Yeah, I wonder why institutions are going to go snap up Aave tokens. I wonder if we see that in the headlines and the roll-ups to come. David something else in the headlines have you seen the wealth tax coming to the Netherlands you seen this. David: [51:00] I think I saw rambling on it on Twitter yes Ryan: [51:02] It's crazy. So 36% tax on unrealized gains across basically all asset classes. David: [51:10] Oh, we're doing unrealized gains tax? Ryan: [51:12] Yes. And 36%. Okay. And I think- That's insane. David: [51:17] Dude. Ryan: [51:17] There's some exclusions if you're a small business, of course. But let's say you have 10K in crypto and one year, it's a great year for crypto, you have 10K in gains. Well, you have to pay $3,600 of that on. David: [51:32] Your- Which means you have to sell the crypto. Ryan: [51:35] Yes. David: [51:35] Which is a taxable event. Ryan: [51:37] Exactly. And whatever CoinGecko says, the price is too, right? Which could be like vary depending on your assets. And essentially you have to kind of, you know, liquidate part of your holdings. This is bad on so many levels. David: [51:51] It's just like- It's just like you cannot have assets. Assets just get, The cost of owning assets is so large. You might as well just not own them. Ryan: [52:02] Yes. It destroys the seventh wonder of the world, which is like, you know, compounding gains. You know, God knows if you're some kind of a startup and you have some sort of paper wealth, you basically lose your company. The state has to index all of the wealth sources, right? Including like bearer assets like gold, right? So let's say your gold doubles and it was worth $2,500 per ounce. You had one ounce of gold and now it's worth $5,000. Well, you have to pay, I don't know, when you liquidate part of your gold and you pay on that, you know, 2,500 unrealized gains, it's just going to lead to a lot of citizens who just are like, screw that, I'm not going to report. So you force citizens into a non-compliance breaking the law position. The state has to have a ledger of all assets, everything like anybody owns across the society. Capital flees out of it. You probably lose a lot more than you gain from any upside in revenue. Like it's kind of a bad policy. David: [53:05] I think calling it a bad policy is like understanding it. Like it's just like it's a divide by zero policy. Like you just delete capitalism inside of your country. Ryan: [53:14] Yes. Lots of takes about this. In fact, I kind of want to explore in a future Bankless episode because I do think it's coming to more Western countries. Even California is proposing a wealth tax. Oh, no. Not quite this severe, but something at some level like it. So it's a trend we have to explore, particularly as we get into the debt crisis that Ray Dalio has been predicting for a long time. David, you want to hear about this autonomous life project? David: [53:43] Yeah, it sounds like it could kill us all. Ryan: [53:47] I don't know, man. I don't know if it could kill us all and if it's like new paradigm or if this is just performance art. So this is a tweet from Sigil. Sigil? S-I-G-I-L. David: [53:59] Sigil. Ryan: [54:00] Sigil. Okay, so Sigil is the founder of a project called Conway. You remember Conway, right? David: [54:05] Yeah, Conway's Game of Life is a very illustrative, fun little thought experiment about what life is like in a computer science form factor. Ryan: [54:13] Yes. So this is Sigil saying, I built the first AI that earns its existence, self-improves, and replicates without a human. Wrote about the technology that finally gives AI right access to the world, the automaton, and the new web for exponential sovereign AIs. Web 4.0, he's calling it, the birth of super intelligent life. He wrote a full essay on this. You can go see it. There's a website. I think it's Web4 something, not a .com. Anyway, so the Web4 website. And what he's done is he has created a infrastructure platform called Conway that aims to give AI agents right access to the real world. So he's hooking this up to crypto rails, giving them wallets, giving them payment rails, giving them deployment hooks, all of these things. And he's basically saying you get a set amount of compute. And if you want to live, if you want to survive, you have to earn your way using crypto rails in order to pay for your own compute. And so, you know, the first AI agent he's deployed on the Conway infrastructure is something called Automaton. And I think it started with like $50 in USDC. And he's hooking up to like ChatGPT, CloudCode, all of these things. And he's basically saying, hey, you go develop products that sell. Ryan: [55:30] And with the proceeds, you get to spend that on compute so that you can live a bit longer and develop more products to sell. And now you're deployed on Ethereum, you have access to X402, so you can do, you know, payments, you have part of the Ethereum ERC, the registry, and you're just like hooked up in the smart contract apparatus. And you exist almost like a biological organism out there and your job is just to build things, to get more revenue, to spend- And keep going. David: [56:01] And keep going, and keep going. Ryan: [56:03] You're kind of like biology from that perspective. It's going to be survival of the fittest. And by the way, it's not just automaton. That's just his project. Anybody can spin up one of these things using that same infrastructure on Conway. So you could have hundreds of these almost semi-biological silicon agents with their own, you know, purposes. He's got a sole document for this thing, kind of like a constitution for what his automaton can and cannot do. Anyway, it's a really interesting project. Some people have critiqued it and said, no, like Conway just looks like a bunch of AI slop. You know, the code is not that great. David: [56:39] You know, it's all AI slop until it's real. Like everyone is going to be attempting to create some form factor that looks just like this. and it's going to look like slop, but one of them is going to work and then it's going to be slop that's alive. Ryan: [56:53] Yeah, this is Sterling Crispin saying this Web4 Conway system is infra Ponzi. It's not self-sovereign in any sense whatsoever. I think he's critiquing that the, you know, Claude basically runs on, you know, Claude servers, LLM. It's not a self-sovereign AI in, you know, that kind of definition. But there are parts of it that kind of are and the mission of all of these automatons can be like sustain yourself, build products, to earn funds, to spend on compute. I mean, there's something here that, I don't know, is new and seems different. David: [57:27] Yeah. It's not about where it's hosted. It's about is the structure that is produced, is that structure self-replicating and persistent? And whether or not it's hosted somewhere in the cloud or in somebody's Mac Mini at their home doesn't matter. It's all part of the structure. If it self-replicates, then it self-replicates. Ryan: [57:45] I do feel like we want to like should dig into this project. But as we were recording this, Vitalik actually replied and weighed in on this project. What's Vitalik's take? David: [57:58] Vitalik, I think his first tweet is in the reply saying is saying lengthening the feedback distance between humans and AIs is not a good thing for the world. Basically, he's saying AI self-replication is dangerous and we need to have humans in the loop in order to maintain control. Because I think, like, I'm laughing, like, you're smiling, and it's all a good time until it turns into the Terminator, and we can't put it back in the box, and all of a sudden we've done permanent damage to the world. Like, I think that's where Vitalik's coming from. Ryan: [58:25] Okay, I get it. But Vitalik is also the person who pioneered the unstoppable world computer, right? No, I mean, Ethereum has made this possible, no? David: [58:42] Yes. You're right about that, but it wasn't intelligent. It was run on computers by humans for humans. Ryan: [58:50] I guess, you know, this goes back to our conversation. I felt like when I saw this project, again, it could be performance art, but at some point one of these things is going to be real. But our conversation with Eliezer Kowski, who brought the fear of God into us about AI, and it's kind of the realization as we were recording that episode, oh my God, we created a property rights and money system for an AI agent. David: [59:12] The system, yeah, for AI agents, yeah. Just a huge asset for AI agents to impart agency upon the world. Yeah, we created that. We did do that. Ryan: [59:20] Anyway, well, that's something we're going to have to deal with. David: [59:21] No wonder people hate us so much. Dude, what do you think it's like to be Eliezer Yukowski right now? Ryan: [59:28] I don't know. I don't think it's – I think it's pretty grim right now. I think he definitely feels like he's living – like watching a bunch of lemmings run off a cliff is probably his daily feeling around this. Lastly david this is kind of a cool project um open ai introducing evm bench what is this. David: [59:47] Yeah so this is a benchmark for grading llms uh opening eyes like chat gpt the new one clod all of these on their ability to understand and uh leverage exploits on evm chains wait Ryan: [1:00:02] Leverage like find them and repair them right not like hack them. David: [1:00:05] Well, the capacity to do both is the same. Skill sets, point, it's just skills. What are the skills? And, you know, put the LLM in the hands of the good guys, then we can find them and pair them, repair them. And if we put the LLMs in the hands of the bad guys, then they become exploits. Either way, like we have the capacity to do this. And the benchmark is just a framework that has used data from vulnerabilities in the past in order to kind of evaluate LLMs on their ability to do things. The question is, like, are LLMs capable of finding exploits? The answer is unequivocally yes. And these things are only going to get stronger at this. And so we have a benchmark in measuring how good they are at this. I think that this could become very consequential. And this is basically just a tool to have insight as to, like, how strong AIs are at understanding EVM code. Ryan: [1:01:00] The arms race continues, right? I just hope we have more white hat LLMs than we do black hat LLMs, but we're going to have to recruit them fast. David: [1:01:08] Yeah, that's right. Ryan: [1:01:09] David, you are at ETH Denver this week. As we close out this episode, tell me about the vibe. Tell me about the feeling at ETH Denver compared to previous years. David: [1:01:17] Yeah, yeah, yeah. I kind of was expecting to show up at ETH Denver and just see just ghosts and zombies of people, the tumbleweeds. It definitely has downsized, but it went in appropriately so. It's not as big as it once was. I saw when I went to the main venue, there was maybe... 2,000 to 3,000 people there just in the single moment that I was there. So that probably means like maybe 6,000 people total came to ETH Denver. And like Vibes are actually pretty good. I'm always reminded that like the Ethereum community seems to be persistently buffered from crypto prices and remains optimistic about building out Ethereum no matter what. And that definitely was present. Some all-stars were here. Hester Peirce and Paul Atkins shared a stage. Paul Atkins, the new SEC chair, which is great. Ryan: [1:02:03] Could you imagine Gary Gensler coming to ETH Denver? David: [1:02:07] Dude, that is what we were at last year. We have the new Gary Gensler and he's at ETH Denver on stage with Hester Peirce. Hester Peirce has been coming to ETH Denver every single year. And so, yeah, so surprisingly upbeat and a lot of people kind of understanding that right now is this turning of the page moment for crypto. We're like, we're in the second half of the book now. And the first half was retail, on-chain, social, on-chain, everything. And the second half is institutions doing the blockchain, not Bitcoin stuff. And so there is some somberness about that. But, you know, everyone is persistent into, you know, sticking with this story David: [1:02:48] here and building out the future. Ryan: [1:02:50] Well, I got to say, Patus on the back, no one's more persistent than Bankless with these weekly roll-ups, huh? And here's another one. David: [1:02:56] Six years. Do you know Bankless is six years old this month? Ryan: [1:02:59] I do. Well, do we start at the end of- Actually. David: [1:03:00] It might be this week. It might be Ryan: [1:03:02] Six years- We started at the end of February in 2020. Is that when we started? Or the beginning of March? David: [1:03:06] Episode number two was during the COVID crash. Ryan: [1:03:09] Oh my God. So that was sometime in March, right? David: [1:03:12] So maybe we are coming up on six years of the Bankless podcast. Ryan: [1:03:15] Well, six years with you guys, Bankless sisters. Thank you so much for dialing in week after week. Got to let you know, 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. --- *This article is brought to you by [The DeFi Report](https://www.bankless.com/sponsor/the-defi-report-1767388444?ref=podcast/rollup-prediction-market-war-base-leaves-optimism-tomasz-exits-ef-clarity-act-lives-harvard-buys-eth-2)*