ROLLUP: Uptober Rally | Tom Lee $1B ETH Buy | Vanguard Flips to Crypto | Stripe Stablecoin Play

TRANSCRIPT

Ryan Sean Adams:
[0:03] Bankless nation it is the first week of up timber no

David Hoffman:
[0:08] No no it's uptober god damn it we practiced this.

Ryan Sean Adams:
[0:15] Bankless nation listen to my voice it's croaking david yeah i'm not gonna be able to get through this rule it is the first week of uptober yes that's prices are high how are you Prices are up.

David Hoffman:
[0:30] How awesome was it that like, I looked at the prices on the first. Yes. I was like, oh, hell yeah, we're green. We're moving up. We're moving up. And I'm like, oh, it's the first. It's October. Yeah. The prophecy is fulfilled.

Ryan Sean Adams:
[0:44] Of course. And now we're recording it on the second day of October.

David Hoffman:
[0:49] Which is also green.

Ryan Sean Adams:
[0:49] It's also green. So what can we conclude about the third day of October and the fourth day and the fifth day?

David Hoffman:
[0:57] 30 days of green, baby.

Ryan Sean Adams:
[0:59] 30 days of, wait, 31 days of green.

David Hoffman:
[1:01] 31? It's a long month.

Ryan Sean Adams:
[1:03] All the, thank God it's 31 days of green. Is that what we're calling?

David Hoffman:
[1:08] This is how Ryan and I do analysis on prices.

Ryan Sean Adams:
[1:12] We got a lot to talk about. And forgive me, Bankless listeners, for my voice. I'm a little croaky on the week. I got a

David Hoffman:
[1:17] Cold going on. He's just so excited.

Ryan Sean Adams:
[1:21] We got to talk about Tom Lee. He caused a flippeting with a $1 billion ETH buy. Another $1 billion ETH buy. Not the flippening I was hoping for, but a flippening of one sort or another. We'll talk about that. What else we got?

David Hoffman:
[1:34] Another flippening from Vanguard, the previous crypto haters, to now crypto capitulators. So Vanguard is now allowing, opening up crypto ETFs. So what caused them to flip from anti-crypto to pro-crypto? We're going to talk about that. And then also, Stripe has released a product that could just kind of just blow open the doors of the USDC-USDT duopoly.

David Hoffman:
[1:59] Between Tether and Circle, they have like 92% market share or something very dominant. Stripe wants to change that. So what do they release this week that's going to change the game?

Ryan Sean Adams:
[2:09] We also have Swift, you know, the big juggernaut of global payments. Are they finally coming to crypto? Because they are teaming up with ConsenSys on some kind of an EVM blockchain. That's been in the headlines. Also, you know that Tether-backed Plasma chain, that Layer 1 focused on stable coins for Tether? They had a massive launch this week.

David Hoffman:
[2:29] Plasma is the name.

Ryan Sean Adams:
[2:30] Yeah, Plasma. Yeah, what did I say? They had a massive launch on the week, all right? And the only question I have is, which we can discuss, would it have been even better as an L2?

Ryan Sean Adams:
[2:41] Or is that some ETH Maxi Cope?

David Hoffman:
[2:44] The perennial question. Before we get into all that, we got to talk to our friends and sponsors over at.

Ryan Sean Adams:
[2:49] All right, tell me about prices. Actually, before we do that, can we talk about, this is the first U.S. government shutdown that we've ever seen in the course of doing this podcast, all right? The government is shut down right now at the time of recording.

David Hoffman:
[3:04] The UN, the United States government. What does that mean exactly? Like, what rules have gone away?

Ryan Sean Adams:
[3:11] Okay. Just mass chaos out there. Do all the rules still apply? No, okay. So important stuff like Medicare, right? Seniors receiving their healthcare checks. Stuff like air traffic control. That's still happening. That's all still running. Okay. But the non-essential programs are effectively closed. So 900,000, almost a million federal employees were just sent home without pay. Just being like, sorry, guys, the government shut down. You don't have to come in.

David Hoffman:
[3:36] Federal employees.

Ryan Sean Adams:
[3:36] Yeah, federal employees.

David Hoffman:
[3:37] Okay, so not like state police. We're not doing a purge.

Ryan Sean Adams:
[3:41] No, no, no, that's the state. No, that's the state. It's federal employees. I'm sure the military is still operational. At least I would hope so. They got to be some of the essential workers here.

David Hoffman:
[3:49] The military is asleep quick in the United States.

Ryan Sean Adams:
[3:53] Um, anyway, so this shutdown happened on Wednesday due to a deadlock in Congress. So this is, uh, Democrats basically have the ability to kind of like shut down the government. Uh, there's disagreement on spending levels. Democrats want more for healthcare. There's some affordable care act stuff. There's some Medicaid stuff. Uh, Republicans don't want to give it to them. So the Democrats are digging in and saying, we're going to shut down the government until you give us what we want. I think this is also broadly, more broadly, some political posturing, right?

David Hoffman:
[4:23] Yeah.

Ryan Sean Adams:
[4:24] Republicans have been pretty much in control since Trump took office, and they were just like dominating the political agenda. And it's felt like Democrats haven't really regained any strength. And so I think the left is basically saying, Democrats, you got to stand up to Trump. You got to do something, this unchecked executive. So I think there's a little bit of political posturing going on, which is this is the Democrats standing firm against Trump and his agenda. This will all play out in the court of public opinion, of course. Does the public blame the Democrats or the Republicans for this? How does this get resolved? The last time this happened was in 2018. So again, before the podcast, I think probably another, I was in the crypto bear market of 2018. It was the longest shutdown in history. It was 35 days. So that could happen here. Hopefully not. Hopefully it's shorter.

David Hoffman:
[5:18] I mean, crypto prices just started moving, like going up as soon as the government shut down. Yeah, that's the thing. Coincidence?

Ryan Sean Adams:
[5:25] The market doesn't care, I think. Like even stocks, they're not down on this news yet.

David Hoffman:
[5:30] My stocks are up. I don't know about yours.

Ryan Sean Adams:
[5:32] Yeah, they're doing okay, right? And crypto is like way up, so the market is just brushing this off. Yeah. It could shave about $1 billion off GDP per week as long as this lasts. But- When the shutdown is back on, basically government's open, all the payments that were furloughed get repaid. So I think the market is basically pricing in that this gets resolved. It's just political posturing and it's like no big deal.

David Hoffman:
[5:59] Okay.

Ryan Sean Adams:
[5:59] So that's the shutdown, David. All right. Congrats. Cool. We're doing a shutdown again.

David Hoffman:
[6:04] We can't, again, we just can't, there's nothing we can get away with while the government is down. Like, what can we do here?

Ryan Sean Adams:
[6:10] I don't know, man. I guess maybe it's good news. It's like for government employees, they get to have a little like early holiday, fall holiday.

David Hoffman:
[6:17] Yeah, but it's unpaid though.

Ryan Sean Adams:
[6:18] Right? October. October with us.

David Hoffman:
[6:21] It's unpaid holidays. Yeah, unpaid.

Ryan Sean Adams:
[6:24] That's not as fun. All right. Bitcoin price on the week. Give us the good stuff.

David Hoffman:
[6:28] Yeah. Bitcoin up 8% on the week to $119,800. It's kind of remarkable. I'd like to take a moment and just like pause and say when something as large as Bitcoin moves 8%, that is $200 billion that gets added to the Bitcoin market.

Ryan Sean Adams:
[6:46] Wow. You say it like that.

David Hoffman:
[6:47] Bitcoin is like, what? It's like number, I don't know, five biggest asset in the world, something like that.

Ryan Sean Adams:
[6:52] That's a big one.

David Hoffman:
[6:53] And that just moves by 8%. That's huge. That's so much. It's $200 billion. It's minted out of thin air. Ether, up 13% to $4,450, also looking very good. So yeah, blue chips are green on the week. Very green, very green.

Ryan Sean Adams:
[7:08] We're close to all-time highs on both, right? So the all-time high Bitcoin price is what?

David Hoffman:
[7:14] $25,000, $125,000, $124,000, something like that.

Ryan Sean Adams:
[7:17] The thing is, $123,500 is what this is telling me. There you go.

David Hoffman:
[7:22] There you go. So yeah, we still have $4,000 away.

Ryan Sean Adams:
[7:24] And ETH has never broken 5K. That'll be a milestone.

David Hoffman:
[7:27] Thank you for reminding me.

Ryan Sean Adams:
[7:30] Anyway, it's looking good on the week, of course, and we'll see how that progresses.

David Hoffman:
[7:35] We've got a mover of the week, Ryan.

Ryan Sean Adams:
[7:37] Oh, okay. Before we do that, though, you know, we're pretty close on all-time high for total crypto market cap, too.

David Hoffman:
[7:43] Yeah, we're basically there. 4.2 feels good. 4.2 is very strong.

Ryan Sean Adams:
[7:48] And that's pretty much an all-time high crypto market cap. Do you think

David Hoffman:
[7:51] We get to five before the end of the year?

Ryan Sean Adams:
[7:55] Yeah.

David Hoffman:
[7:56] Yeah.

Ryan Sean Adams:
[7:57] Yeah, I do. Wow. I definitely do. You really do.

Ryan Sean Adams:
[8:01] Yeah, I really do. I think this is – wait, do you not think this is going to be a – do you not believe in October? No, no, no.

David Hoffman:
[8:07] I totally think five is within striking distance.

Ryan Sean Adams:
[8:10] I think it's within striking distance by next roll-up, David, by next week. We could be at five.

David Hoffman:
[8:16] We could have one of those weeks. You're totally right.

Ryan Sean Adams:
[8:19] Do you not think that this is going to be the most bullish quarter of the cycle for crypto?

David Hoffman:
[8:25] Yeah. I mean, seasonality suggests so. Like October and November and December have historically, especially when you pair them inside of bull market years, of which this is one. Yeah. October, November, December is historically like the best time. So like we potentially have the best time ahead of us. But nonetheless, I would still like to slow cook as long as possible.

Ryan Sean Adams:
[8:49] Not me, man. I'm ready for it. What? I'm ready for $10 trillion. I'm ready. This is the quarter, man. If it's going to happen.

David Hoffman:
[8:57] You want to have the blow off top? That ends it all.

Ryan Sean Adams:
[9:02] I still don't think we blow off top this quarter. I know I was talking to Michael Nadeau, you know, the Crypto Fundamentals episodes we do. he thinks that we're going to get a bitcoin all-time high this quarter and it's going to be the cycle high as well oh this quarter okay

David Hoffman:
[9:19] So cycle and you guys are calling for the top that's you guys.

Ryan Sean Adams:
[9:22] Are bears don't say that's that's that's michael nato okay i am still kind of a believer i think that's a possibility give that 30 percent odds i think that we'll still get an extended full cycle into 2026. And that's kind of my base case, at least into Q1. Into Q2 as well. And we'll get the Bitcoin cycle high sometime there, and then we'll have ETH highs, cycle highs, and altcoin, you know, cycle highs, that kind of thing. Anyway, we'll see.

David Hoffman:
[9:54] I'm personally going for quarter million dollar Bitcoin by December of 2026. So, five quarters from now. A quarter million dollar Bitcoin.

Ryan Sean Adams:
[10:04] Wait, really? Does 2026? I think the cycle could be over by then.

David Hoffman:
[10:09] Well, I don't want that. I want to slow cook our way up to a quarter million dollars over the course of 15 months. I know. You don't want it.

Ryan Sean Adams:
[10:19] But what do you think is going to happen?

David Hoffman:
[10:20] I think that is totally reasonable.

Ryan Sean Adams:
[10:22] We've given Bankless listeners just about every possibility under the sun here. So we should just leave them with, we don't know what's going to happen in the future.

Ryan Sean Adams:
[10:31] But we do know what has just happened with the mover of the week. You were just telling me. What is it?

David Hoffman:
[10:37] What year is it? Zcash, the privacy coin from Zuko. which is both a transparent and a privacy coin. So you can have the shielded side of Zcash and the unshielded side. So you can disclose your transactions to the public or you can hide them. It's a little bit of both. It's hybrid. It's up 42% just in the last day. If you scroll down, I'll tell you exactly how much is up over the last 14 days, which is 30 days. 230% over 30 days. That is crazy. That is crazy.

Ryan Sean Adams:
[11:07] Now look at this, man. This is a god candle. This is really impressive.

David Hoffman:
[11:11] What happened? What animal spirits happened where everyone was like, it's time to bid Zcash?

Ryan Sean Adams:
[11:16] It's kind of surprising, right?

David Hoffman:
[11:18] Have you ever tried to use Zcash?

Ryan Sean Adams:
[11:20] Yes, I have.

David Hoffman:
[11:22] It's hard.

Ryan Sean Adams:
[11:23] It's a little hard, yeah. It's a little hard. Well, has it improved much? I mean, it's been a long time since I've been...

David Hoffman:
[11:28] The last time I used it was when we had Zuko on the podcast. And he was like, please use Zucash before I come on the podcast. I was like, okay, I will. And I haven't recovered any of those tokens that I have on that chain.

Ryan Sean Adams:
[11:39] Did you screw something up or...

David Hoffman:
[11:42] No, it's just so cumbersome. Yeah.

Ryan Sean Adams:
[11:44] Yeah, I mean, I remember the wallets were difficult. Like, it was very difficult to use. But when we're talking about that kind of a gain, we're still pretty low as far as market cap, right?

David Hoffman:
[11:54] 2.1 billion. Yeah, I mean, that's why it can go up 230% in 30 days is because after going up 230 days, 230%, it's at $2 billion. So it was like at $600, $700 million prior to that. But still, it's a big move.

Ryan Sean Adams:
[12:06] I was looking into this. So Zcash is currently listed on Coinbase, Binance, Kraken, and Gemini. But it's been delisted in a number of places too. So notably OKX delisted Zcash, Bitrex delisted it, Huobi back in 2022, Chinese exchange delisted it, Binance actually flirted with delisting it in 2023 and 2024 in part due to some EU laws. About privacy. Yeah. So the threat for privacy coins like Zcash that don't have DeFi ecosystems is that exchanges can delist them if governments get hostile on privacy. I mean, Zcash is basically an app chain for privacy.

David Hoffman:
[12:54] Correct. Yeah.

Ryan Sean Adams:
[12:55] That can only use privacy around a very volatile asset, which is like Zcash, the asset.

David Hoffman:
[13:03] Mm-hmm. Yeah. I mean, I think you're in my stance that privacy is not an asset, it is an app. And so there are privacy apps on Ethereum, Tornado Cash, Privacy Pools, Veil, that can give you privacy on your assets rather than make you buy an asset. Also, nonetheless, the cryptography behind Zcash, top notch. Zuko, very normal. Zcash was birthed before Ethereum was really a thing. I'm pretty sure that's true.

Ryan Sean Adams:
[13:28] Yeah, it's a great project. If you are a supporter of crypto values and crypto values, you've got to love Zcash.

David Hoffman:
[13:34] You're a supporter of Zcash. We like Zcash.

Ryan Sean Adams:
[13:36] Yeah. I mean, do you think this continues? You think we're going to get 2 to 10 billion?

David Hoffman:
[13:39] I have no idea why this happened. 2 to 10 billion? I have no idea why this happened.

Ryan Sean Adams:
[13:42] It's kind of funny. Actually, Uma Roy says this is getting ZK back on people's radar. So maybe she's calling for a ZK season. ZK, Zcash running and the lighter mainnet, which we'll talk about later, institutions coming in. This is bullish ZK, right? So Zcash is really the first at scale chain to ever use ZK technology.

Ryan Sean Adams:
[14:04] And maybe this is a sign of more that's come. Yeah.

David Hoffman:
[14:06] Yeah, that's right. That's right. Let's get into some schadenfreude. Vanguard's finally offering some crypto ETFs. Vanguard, the world's second largest asset manager after BlackRock. BlackRock, notably crypto favorable. Vanguard has always been crypto unfavorable. They've been like, no, sorry, clients of we are the paternalistic protector of. You guys are not allowed to buy crypto ETFs. We're not offering them to you. And everyone in the crypto industry is like, why are you guys doing that? Like no one, you're not winning any new clients by doing this. You're actually just losing clients that want access to crypto ETFs. Anyways, they've just been like a holdouts, like crypto holdouts. They are changing. They are changing. Due to A, rising client demand for digital assets, obviously. B, the SEC recently approving new listing frameworks for ETFs. We talked about that last week or the week before. And then also a new CEO who used to work at BlackRock and helped launch their Bitcoin ETFs is now making Vanguard reportedly to rethink their digital assets.

Ryan Sean Adams:
[15:08] That's probably the big one, right? Yeah, that's probably the big one.

David Hoffman:
[15:11] Yeah, I am. So 50 million global clients, again, second biggest asset manager after BlackRock, finally opening up the door to crypto ETFs. They missed the door on shipping a Bitcoin and Ether ETF. Like they could have had a competitive product, but no, now they don't. They just gave it all to BlackRock.

Ryan Sean Adams:
[15:29] What losers. And they still had to capitulate.

David Hoffman:
[15:31] And they still had to capitulate. And list other people's products now.

Ryan Sean Adams:
[15:33] Yeah. But at least they're coming through the door now. And so maybe we should celebrate them too, David. That's better late than never. Yeah. Yeah.

Ryan Sean Adams:
[15:41] Speaking of someone who's not late, though, which is Tom Lee, okay? He is early to the party. He purchased another $1 billion worth of ETH last week. So that was a 234K ETH purchase. Wow. Look at this track record.

David Hoffman:
[15:57] Casually buying a billion dollars.

Ryan Sean Adams:
[15:59] Just to remind us from, I started this process back in July of this summer, okay? And you could see just some sustained, like, this is how Tom Lee dollar cost averages in. It's like every two weeks, he's putting in a billion dollars. A billion dollars, billion dollars, billion dollars.

David Hoffman:
[16:16] Same, you know?

Ryan Sean Adams:
[16:19] His size is size. So now he's got about 12 billion US dollars worth of ETH right now. He's got about 2.2% of total ETH supply. You remember of the summer, people were, like he said, I want to get 5% of all ETH supply. And people were like, okay, Tom Lee. That's nice.

David Hoffman:
[16:40] Same. I also want that.

Ryan Sean Adams:
[16:42] Yeah, that's cute. Well, like in three months time, he's got almost half that. He's on track to do this.

David Hoffman:
[16:50] And the MNAV is at 1.3.

Ryan Sean Adams:
[16:53] Yes. That's positive. MNAV is up too.

David Hoffman:
[16:56] That's large.

Ryan Sean Adams:
[16:57] It also caused this, David. So this is a chart of Bitcoin total supply in Bitcoin DATS, like MicroStrategy and Friends. percentage of total supply percentage of total supply versus ETH total percentage of total supply in Ethereum DATS and this is the this is a flippening of a sort not the not the real flippening but there's more ETH as a percentage of supply in Ethereum DATS than there is Bitcoin in Bitcoin DATS I

David Hoffman:
[17:28] Think this is a notable metric but I don't know if this is like useful for any reason yeah.

Ryan Sean Adams:
[17:34] Probably not.

David Hoffman:
[17:35] I think what we're actually measuring here is a combination of the age distribution and overall maturity of the respective store value networks that each of these things represent. And so what you're actually just seeing here is that Bitcoin is just six years older than Ethereum.

Ryan Sean Adams:
[17:50] Yeah, but it is notable how quickly Ethereum has done this.

David Hoffman:
[17:53] Yeah, that is true.

Ryan Sean Adams:
[17:54] Because Bitcoin has been doing this for five years. Yeah. And as a percent of total supply, Ether just caught up this summer.

David Hoffman:
[18:03] It is also measuring how fast that happens. It's also measuring how easy it is to acquire the same percentage because of the lower market cap. So it's just like a weird metric that it shows a bunch of different things. And I don't know if any of them are useful.

Ryan Sean Adams:
[18:17] There are some power laws at play with some of these DAT treasury companies. And one of them is volume. Because you actually want your DAT treasury company to be highly liquid. And that liquidity begets liquidity, begets MNAV, begets more purchasing of the underlying asset that you're trying to buy. Bitmine with strategy together, they command 90% of all trading volume of digital asset treasury companies. Bitmine has about 40% of that. So it is winning on the volume metric side of things. And I think that is notable. Also, Tom Lee is winning on the photo op game. Okay, here's Tom Lee with Vitalik.

David Hoffman:
[18:59] Dude, Tom Lee loves his photos.

Ryan Sean Adams:
[19:00] Yeah. We got him with Vitalik this time. This was at Token 2049. By the way, on Token 2049, have you heard much coming out of that? I know you didn't attend, but.

David Hoffman:
[19:11] Yeah, I'm not a token person.

Ryan Sean Adams:
[19:14] Yeah, like what's been the vibe or what have you seen or what have you heard?

David Hoffman:
[19:18] Not too much, really. Um, yeah, the token, like, yeah, the whole Singapore Dubai, like access of conferences is like away from what I typically go to. So I'm not really sure.

Ryan Sean Adams:
[19:30] Yeah. Okay. Well, I guess maybe tune in to, we don't have any takes on this.

David Hoffman:
[19:34] People are there right now and they're coming back. And so people will have their like, here's everything I learned at token tweet threads next week.

Ryan Sean Adams:
[19:40] Okay, we'll have to look. It doesn't seem like it's a very loud conference. In Token, 2049s of the past have seen more content, more kind of like, I don't know, party content, something.

David Hoffman:
[19:51] Yeah, that's what I understand Token to be is like a very big party festival. My style of conference is more down in DevConnect, Ryan, where there's a Sato everywhere, a Sato in mountains. That's what I'm going for. To round out the DAT conversation, this came out of Reuters. U.S. regulators probe stock market moves before companies made crypto treasury announcements. So apparently the SEC is looking at investigating insider trading at some of the DATs, which actually kind of like checks out because I would like.

Ryan Sean Adams:
[20:20] That's great.

David Hoffman:
[20:21] Look at all the DAT announcements. And then you would see that there has been just like price volatility, mainly to the upside, for a lot of these assets, like a couple days to weeks before they got announced. I'm like, huh, I don't know if it's supposed to be like that.

Ryan Sean Adams:
[20:35] It's not supposed to be like that.

David Hoffman:
[20:36] I don't think it's supposed to be like that.

Ryan Sean Adams:
[20:39] Yeah, and so the SEC is cracking down where it should, right, where insider trading laws are being violated. So that's a good thing to me. David, what do we have coming up next?

David Hoffman:
[20:48] Coming up next, Plasma, the stablecoin chain backed by Tether, becomes the sixth largest chain in less than a week by TVL. But Bankless asks, why aren't they a layer two? And then Stripe wants to give everyone a stablecoin. So hopefully the duopoly between Tether and Circle is over. And then also Cloudfair is launching a stablecoin on base. What is Cloudfair doing with a stablecoin? And why is it pretty neat? Why do I think it's pretty neat? We're going to talk about that and more right before we get to some of these fantastic sponsors that make this show possible. In less than one week, the new Plasma Layer 1 has been able to put $4 billion, oh, excuse me, $6.5 billion into the Aave deployment on Plasma, making that Aave deployment the number two largest Aave deployment after Arbitrum. Forex bigger than their third place Arbitrum, which is pretty crazy. Plasma, of course, it's the Tether, not incubated, but Tether bootstrapped, backed, and enshrined layer one. So very fast payments chain for the Tether stablecoin growing very, very quickly by pretty aggressive XPL incentives. XPL is the token of Plasma. And so if you deposit like Tether, you get a bunch of like rewards. And that can go anywhere between like 12% and 20% rewards.

Ryan Sean Adams:
[22:06] And that's what's happening with Aave, right? Like these yields are juiced with XPL rewards.

David Hoffman:
[22:11] Yeah, yeah, yeah. So if you have like a bunch of tether, you can get some yields and juicy yields. I remember when I was farming Aave on Polygon during Polygon summer of 2021, Ryan, and I was getting like, I was like, no one tell anyone about this because I'm getting 60% APY. This is ridiculous. Yeah, so some of that's coming.

David Hoffman:
[22:32] Yeah, question, Ryan. Everyone in the ecosystem is asking this. Yes. Why is Plasma not a layer two? Why is it a layer one?

Ryan Sean Adams:
[22:41] Yeah. I mean, I think there are a lot of technical reasons that are given for this, for sure. Actually, this was a tweet thread that I enjoyed from AJ Warner from Arbitrum, who actually says that, ironically,

Ryan Sean Adams:
[22:59] Plasma would have been much better off with a layer. too and one of the reasons why right now plasma does not have a decentralized validator set at all so it's a layer one it's evm but plasma is the only group that's actually running the validators for this chain so it's like completely centralized now in order to decentralize they're going to have to give some of their uh xpl tokens as rewards to validators right and so they're targeting about five percent of total um you know annual issuance per year to go to validators for rewards so if you kind of like do the numbers on that add an fdv of an impressive 10 billion dollars which is what plasma is trading at right now five percent of that is about 500 million per year and that's a cost to hoarder to holders of xpl tokens right it's a cost essentially to the network um and uh aj makes the case that well like you could just save all of this money if you were a layer two instead yeah and when you look at that i mean it seems to kind of line up i don't think there are technical reasons that really that really fundamentally prevent plasma from being a layer too at least all of them seem like they could be navigated what I think is actually going on here David It's something that I think of as the layer one premium.

Ryan Sean Adams:
[24:28] So for whatever reason right now, the market is assigning a juicy premium to layer one tokens versus layer two. And I can give you some comments for this. So think of something like Arbusham as a layer two. FDV, it's 4.3 billion. Optimism, about 3 billion. ZK Sync is about 1 billion. Then switch to layer ones, like Tron, for example, $32 billion.

Ryan Sean Adams:
[24:56] Plasma, $10 billion, right? There's like a nice juicy layer one premium that layer twos are not getting. And let's say that $5 billion of the plasma FDV is that layer one premium, right? Well, like it's not worth it for them to become a layer two just to save $500 million a year. I mean, it would take 10 years for that to actually pay off from an ROI perspective. In addition to that, they can adjust issuance down to whatever they want in the future, can't they? So it's 5% now. In the future, it could be like 1%. It could be 2%. So I do think that there is a driving market incentive and ROI for chains to launch as layer ones so long as this L1 premium exists. And people in the Ethereum camp are saying, like, why isn't this, why is Tempo, why is ARK, why is Plasma not a layer two?

Ryan Sean Adams:
[26:01] It's because the market structure is not rewarding that. It's like market rational to be a layer one. If you're aiming for and you think you got a shot at a decabillion dollar valuation, then just be a layer one. You can always pivot to a layer two later. and the market is just rewarding that now. Anyway, that's my take. What do you think?

David Hoffman:
[26:23] I think if we're doing the whole layer two thing, we've called layer twos dictator in a box, right? One single box, one single dictator, constrained. So like dictator can't be bad. Like it's constrained for what the powers that the dictator has. But then you get all the benefits of centralization and you have just this one node that can go super fast. We also do know, especially when we did our SOV episode with Jonah, we did a thought experiment. where like, all right, if all Bitcoins in the world got centralized to one person, what would the value of Bitcoin be? And the answer would be far lower because part of the value of Bitcoin is that it's a payment, it's a distributed payments network. It's owned and operated by a decentralized set of stakeholders. And so perhaps the layer two model is like destructive, value destructive because there's no network. It's just this one operator. And so maybe, yeah, maybe from a user perspective, the chain is the same. And actually, maybe it's even better as a layer two. It goes faster, has lower latency as a layer two. But you don't have a distributed ecosystem set of stakeholders because you've done the whole dictator in a box thing.

David Hoffman:
[27:29] And so perhaps layer twos are like value destructive in that sense. Like you don't get any sort of like Metcalfe's law premium that we are seeing in the layer one.

Ryan Sean Adams:
[27:38] Maybe. Or maybe the like layer one premium will always exist. Or maybe it's it goes away over time. Maybe it's kind of dumb that it's there in the first place and it's just comped based on Bitcoin and XRP.

David Hoffman:
[27:54] It's always been there. It has. It has. I am noticing that like there are layer ones launching at very high valuations lately. Like double zero, not a layer one, but it is a token. Launched yesterday at $7 billion FDZ.

Ryan Sean Adams:
[28:10] What did?

David Hoffman:
[28:10] Double zero. We're going to talk about it later. Yeah. And so we're having token launches coming in at like.

Ryan Sean Adams:
[28:15] Oh, but double zero is not a layer one like blockchain. It's a completely different thing.

David Hoffman:
[28:19] But my point is, is that when we launch tokens at billion dollar valuations, we are going to. that is early stage froth that's a froth magnet yeah and like all of a sudden like oh seven billion dollars let me go launch a layer one and that's how the layer one premium disappears is like the layer one froth magnet gets a little too strong we launch a bunch of low quality layer ones and then that premium gets milked and then we enter a bear market yeah i.

Ryan Sean Adams:
[28:46] Could see that happening as well for sure i mean if if the premium goes away it's going to go away for some chains not all chains during the bear market, isn't it? It's not going to go away right now. Let's talk about this next story. So it begins with Phantom launching a chain. So Phantom, of course, is the browser and mobile wallet, most popular on Solana, also extending to other chains. They have launched a stablecoin called Cash. You recall, was it last week or the week before, Metamask launched its own stablecoin. It seems like all of the large wallets are going to have their own stablecoin, which is notable. So Cash is going to be Fantom's native and default stablecoin. Here's where it was actually issued. It was issued through Stripe's bridge infrastructure, David. And that gets into the next part of this, which is Stripe launching a platform called OpenIssuance. This is a Stripe collaboration. Recall they acquired a company called Bridge. We had Zach Abrams, the founder of Bridge, on Bankless back in September,

Ryan Sean Adams:
[29:52] and he told us all about this. But Bridge is basically a Stripe product that allows anyone to roll their own stablecoin. And Phantom used open issuance as the easy button for just rolling their own stablecoin.

Ryan Sean Adams:
[30:10] Why do you think they did this? What are the reasons why Phantom would need or want its own stablecoin?

David Hoffman:
[30:18] For the yields that they get to pocket, isn't that the whole idea?

Ryan Sean Adams:
[30:23] Yeah. And sometimes it's pocket, but at least it's not giving them to USDC or Circle or Tether. They can give it to their users too. Right.

David Hoffman:
[30:36] The answer to your question is like, why does this entity that has distribution, why do they issue a stablecoin? It's because they get to dictate the yields that would otherwise be going to Tether or Circle. And so they get to give them to users. They get to pocket them. But now it's theirs to have.

Ryan Sean Adams:
[30:52] And that's the main use case for open issuance. So picture you have large AUM in stablecoins. You're a wallet. You're an exchange. You're a bank. Like whatever you are, right? You're some sort of entity. Well, if you have like $500 million in stablecoins on your platform.

David Hoffman:
[31:09] That users have deposited into your wallet. So if you're phantom and I'm like, I'm a user. I've deposited $1,000 into USDC.

Ryan Sean Adams:
[31:16] It's work you've done. You've got that AUM, right? Yeah. Well, your customers aren't getting it. They're not getting it. Yeah. So who's getting that $25 million a year, whatever, the 5%, something like that, on your $500 million in stablecoins? It's Circle. It's Tether. Yeah. And you're doing all the work. This is what Hyperliquid realized. And they were like, we don't want to give this yield to stablecoin. We're going to create an RFP process for a native hyperliquid stablecoin. Anyway, that same conversation is being had by all of the fintechs,

David Hoffman:
[31:49] All of the wallets.

Ryan Sean Adams:
[31:51] All of the exchanges. And now there is a very easy way to just roll your own stablecoin so they can off the shelf get their own stablecoin. So picture this. A user just contributes cash into a wallet. It's just converted into something. It's not USDC or Tether. It's just called digital dollars. It's completely abstracted from the user.

David Hoffman:
[32:11] I have $200 in Venmo. Yeah.

Ryan Sean Adams:
[32:14] Or it's even like- I have $200 in Phantom. Yeah. Or it's like a Starbucks card, right? You don't get Starbucks dollars, right? Let's say you have a loyalty card.

David Hoffman:
[32:23] Yeah, you just have dollars.

Ryan Sean Adams:
[32:24] It's on the Starbucks balance sheet, but it's basically just dollars, and that's how they denominate it. I think this is going to happen all over the place. In fact, Nick Carter wrote an interesting essay this week He basically thinks that the Tether and Circle duopoly, where they've had, I think you said like 90% of the market. I mean, something close to that. Yeah, 91% of the market in March 2024.

David Hoffman:
[32:49] 91.6. I said 92%.

Ryan Sean Adams:
[32:52] So it's fallen, by the way, right now it's 86%. But Nick Carter says it's going to continue to fall. And it's basically because there's an incentive for a stablecoin explosion, intermediaries rolling their own chain, where they get to customize the properties. They can figure out what reserve assets they want, who gets the yield. They can use that yield to incent customers and growth. That's what all of the fintechs are doing. And this is going to lead to a stablecoin explosion. hopefully not in a way that fragments the market because I think it's all going to be abstracted and they're just going to be called dollars. As long as it's a genius bill stablecoin, it'll just be called dollars in the

Ryan Sean Adams:
[33:34] user experience and that duopoly will end and that market share will shrink.

David Hoffman:
[33:40] I mean, these are new banks. And I say that positively. Why does Phantom want to do this? Well, they want to have the deposits so they can get the yield, just like a bank. But the difference is, is that it's a stablecoin on a blockchain. So you all get to audit it. It's not a black box. Users have the ability to exit. And it's just like a lot more transparent. And so like, to me, I look at our episode with Austin Campbell that we did a while ago, which was like his whole thesis was, you know, if 2008 happened under a stablecoin paradigm, we would all have been fine. And actually, there would not have been 2008. It just wouldn't have happened. Yeah. Because of the transparency and the auditability and the lack of the black box nature, if customer deposits in banks had been stable coins, not... fractional reserve lending.

Ryan Sean Adams:
[34:29] Yeah and that's other thing is like um it's not going to be the phantoms of the world and exchanges of the world that are keeping the the four percent yield for themselves i think they'll be forced to pass the majority of that to customers to users yes they might carve off like 25 bips something

David Hoffman:
[34:46] Very small yeah you know the 25 bips that you were getting in your savings account in wells fargo now that's the 25 bips is actually what phantom is getting exactly And the users get all the money.

Ryan Sean Adams:
[34:58] Yes. So users, consumers benefit from this. And it's really fantastic. It's a byproduct of the Genius Bill.

David Hoffman:
[35:04] Thanks for fucked.

Ryan Sean Adams:
[35:06] You mentioned Cloudflare earlier in the episode. So what are they doing?

David Hoffman:
[35:11] So issuing a stablecoin on Base. So they're working with Base. Base is building this thing called X402. I think we've mentioned it a handful of times on the weekly roll-up. It's a payment standard for the internet. Kind of like HTTPS, TCPIP, X402 is when a website is like, hey, you just pinged my website, but if you want my data that I have on this website, you got to pay me.

Ryan Sean Adams:
[35:34] Yeah.

David Hoffman:
[35:34] Pay me four cents and I'll show you the data. And that goes through the X402 protocol. And the idea is like you probably have a wallet in your browser. And then the browser is like, hey, do you want to pay this website seven cents to like look at what's going on here? And you're like, yes, I do. And then you can open up that website and it's beautiful and there's no ads. is the idea is my version of the future that i would like and so i think that's a good.

Ryan Sean Adams:
[35:56] Version it's also so that's a human doing it but also in many more cases it's probably just going to be machines like yeah your ai um chat gpt interface is just yeah exactly it's like my microtransactions to get

David Hoffman:
[36:10] Hey my user asked me to go do this service can i do this service and you're like yeah you can totally do that service pay me seven cents pay me a dollar exactly something yeah yeah.

Ryan Sean Adams:
[36:19] So So this is Cloudflare doing it with their own stablecoin, deploying it on base. Reminder, 20% of the internet runs on Cloudflare. I thought it was more than that. I thought it was too, but I don't know what portion of the internet they're talking about. A large portion of the internet runs on Cloudflare. So this is distribution for machine to machine or agentic payments using this X402 standard. And Cloudflare can just like insert their stablecoin into the process, make that a default and win that way too.

David Hoffman:
[36:48] It's a great- 20% of all websites. I wonder if what represents traffic, what if traffic that is.

Ryan Sean Adams:
[36:56] Yeah. But it's a huge deployment and opportunity for partnership between Coinbase and Cloudflare. I'm pretty excited about that blend of Web1, Web2, and crypto. In fact, we're trying to get them on the podcast, right?

David Hoffman:
[37:11] We're going to get them on the podcast, yeah. The creator of XR02 and then potentially the founder of Cloudflare. It's going to be thick.

Ryan Sean Adams:
[37:19] All right.

David Hoffman:
[37:19] Coming up next is Lighter, Ethereum's answer to Hyperliquid. We're going to talk about Lighter, a decentralized perpstex that just hit main net this last week. Shane from Polymarket gets flipped off by this old guy from CME at a CFTC roundtable. What's going on over there? And then also Swift is teaming up with ConsenSys to do something on an EVM testnet. what could possibly happen next we're gonna get to all that and more but first we're gonna talk to some of these fantastic sponsors that make this show possible okay.

Ryan Sean Adams:
[37:55] So i've been seeing some stuff about lighter this week david which is like a perps exchange using some zk magic it's like a zk ethereum layer 2 roll up i don't know is this like ethereum's answer for to hyper liquid for like a layer 2 perps decks is that what this is

David Hoffman:
[38:12] Oh potentially um it is lighter it's a decent perplex uh just like dydx just like hyper liquid just like any of the other decentralized perplexes that have come before um do you ever did you ever use dydx when it was a stark x zk roll-up yes yeah yeah and all of everyone in ethereum was like this is sick uh because it was super fast and you just had your assets on ethereum you just bridged it out and then dydx was uh decided to go off into the, And then we were like, collectively, Ethereum was like confused. It's like, why are you doing that? Just stay on Ethereum. And then we had GME with the AMM PerpDex model. And then Hyperliquid came and like blew the doors open with just like, yo, we just have like a very low number of validators. And we're going to truce up this chain. And that's the PerpDex. Later, we're going full circle. We're doing the ZK roll-up thing again.

Ryan Sean Adams:
[39:06] But it's a different kind of ZK roll-up. It's not using like StarkNet.

David Hoffman:
[39:10] It's not using StarkX. It's not using Starks. Yes, it's using Sysync's prover network. So Sysync is like kind of this backend service provider to do the entry and exits deposits onto the ZK rollup. And so property rights, user property rights are assured that way. I remember you had a tweet that went out a while ago. It was like, yeah, what if like Hyperliquid ever went down? Like how would users get their money back? I don't know if you ever got an answer to that. The answer for LIDAR is like, oh, you got ZK proofs.

Ryan Sean Adams:
[39:40] Part of the answer was, stop flooding hyperliquid, Ryan. Like, why do you hate it? And I was just like, oh, that's not what I'm saying. I was just kind of wondering.

David Hoffman:
[39:48] No, it was a fair question. I think people, I mean, okay, maybe to give that reaction the benefit of the doubt, it's like maybe people thought we were flooding people's bags. But like, no, we were just asking. You were just asking. So like, yeah, hypothetically, what happens to property rights?

Ryan Sean Adams:
[40:01] Right.

David Hoffman:
[40:03] They also said- Unknown answer. Unknown answer.

Ryan Sean Adams:
[40:05] Yeah. I think it basically, but the answer is if basically Hyperliquid goes down or the validators go down, it just shuts down the same way Coinbase would kind of shut down.

David Hoffman:
[40:15] Now, once it resumes- The same way that like Solana, if Solana shuts down, can you get your assets back? No. Same thing with Ethereum. If Ethereum went down, can you get your assets back? No.

Ryan Sean Adams:
[40:23] Exactly.

David Hoffman:
[40:24] But Ethereum's never gone down.

Ryan Sean Adams:
[40:25] Okay.

David Hoffman:
[40:27] Anyways, Lighter uses ZK proofs to ensure user property rights. So there is- I'm pretty sure this is true. There's like an exit hatch, a ZK exit hatch for users to withdraw funds. But other than that, it's just an off-chain. It's its own ZK roll-up, and it's a perpdex. And it has accrued $800 million of USCC deposits. So quite large. It's been running in beta for the last eight months or so, and it just took down the gates. So anyone can go and join the perpdex. And it's got a ton of hype. It's gotten a ton of hype.

Ryan Sean Adams:
[41:03] Yeah. Well, it's just because it's like perp-dex season, right? And so this

David Hoffman:
[41:07] Is like- Hyperliquid just defines like this is worth billions of dollars.

Ryan Sean Adams:
[41:09] So these are all the Hyperliquid alts, basically, taking a crack at it. You've deposited some into this. So you've tried it out. What is like the bridging experience like? Because it's actually like kind of hard and kind of cumbersome to go bridge to Hyperliquid right now. Like for instance.

David Hoffman:
[41:25] Yeah. You have to get your USCC. No, I haven't done it. I'm sorry. Hyperliquid people. Deposited. You would deposit USDC onto Arbitrum, and then there's a bridge from Arbitrum to Hyperliquid.

Ryan Sean Adams:
[41:35] Yeah, and you could shortcut all of that with some, like, bridge. But you still have to bridge. You have to take your existing assets and bridge it. It's kind of a pain. Do you have to do the same to get into?

David Hoffman:
[41:45] You sign in with your wallet. You make an authentication transaction with your wallet saying, yes, I own this wallet. And then with the USDC that you have in your wallet, you click the deposit button. You sign the transaction, and then it's in there.

Ryan Sean Adams:
[41:57] It's immediately there? Or does it take time?

David Hoffman:
[41:59] So you have to initialize a wallet. So you have to make an account with LiDAR, and that takes 15 to 20 seconds. And then after that, it's instant.

Ryan Sean Adams:
[42:11] Okay. And is there gas fees to do that? Like ETH layer one gas fees?

David Hoffman:
[42:15] There are ETH layer one gas fees, which cost me like $0.07.

Ryan Sean Adams:
[42:18] Okay. Yeah. Yeah, that's good. I mean, that's pretty similar to how it is to get assets on Hyperliquid. Much easier than a centralized exchange, right? I mean... far easier to go through aml kyc and your name and identity password like yes yeah way

David Hoffman:
[42:34] Easier yeah yeah so um okay so just to comp it 840 million dollars in uscc deposits on lighter and that's compared to hyperliquids uh almost six billion dollars of uscc deposits so hyperliquid obviously very strong um but like for a beta that's now on mainnet you know coming up on a A billion dollars is pretty good.

Ryan Sean Adams:
[42:55] How is this different? So this is a ZK roll-up approach. How is this different than the Synthetix, like perp exchange that you were talking to me about last week?

David Hoffman:
[43:08] Synthetix doesn't use ZK, and so it is trusted. The order book is trusted. It's a black box order books that clears every 12 seconds. There's a little bit. So we're having the founder, Vlad, of Lighter on the podcast, So these are questions that I would love to ask, Vlad, because like once you once you have money deposited into letter, you can just start clicking buttons and like you don't need to authenticate your wallet or sign a transaction in your wallet once you have USEC in there. So like, is that trusted?

Ryan Sean Adams:
[43:36] I don't know. I don't know. There's so many different designs for this kind of like purposes. It's pretty interesting. David, crypto is going mainstream, TradFi mainstream in some big ways. Some more evidence of this on the week. Société Générale how is that for my accent?

David Hoffman:
[43:53] I don't know how you pronounce that company.

Ryan Sean Adams:
[43:55] They launched this is a big bank of course SG launches a stable coin with Morpho and Uniswap. What? Yeah. What? It's a major bank What's Uniswap doing there?

David Hoffman:
[44:07] Parting with DeFi companies.

Ryan Sean Adams:
[44:09] This is a Mika compatible stable coin euro stable coin and then a dollar based backed stable coin It just goes to show how much DeFi business development is integrating now with traditional finance firms and even the big banks, right? Yeah. So what about the Morpho part? The stablecoins are directly deployed into Morpho lending vaults, and institutional retail users can borrow or lend the euro stablecoin and USDV against eligible collateral. And then Uniswap, their part in this is listings. They're going to create spot markets on Ethereum for all of these assets. So there you go. Also, the Swift news. So this was the headline. Swift, this is, of course, the global payments network that basically handles all payments across the globe. It is the absolute juggernaut. They teamed up with Ethereum software giant ConsenSys for a blockchain prototype. What is going on here?

David Hoffman:
[45:11] We don't really know, but that's kind of the thing. So they're teaming up with ConsenSys, which we kind of know where that's pointed. Like they have their own EVM layer 2. We watch somebody from Swift mint a tokenized bond on the Sepoilia testnet. So an EVM, Ethereum, testnet. And so they're just doing Ethereum things without, we don't actually, there's no announcement to talk about, there's no release, but they're teaming up with ConsenSys and they're minting bonds on an EVM testnet. So, like, maybe a calm before the storm, before some big hammer drops, but we don't really know at this moment.

Ryan Sean Adams:
[45:47] When you say a big hammer, you're talking about a good big hammer.

David Hoffman:
[45:50] In a good way, yeah.

Ryan Sean Adams:
[45:51] Yeah, so you're saying this could be the start of something really big, or it could be a nothing burger. We just don't know.

David Hoffman:
[45:56] Right now, it's like, you know, announcements of, like, a trial. Very ripple-coded. It's like, we're testing things. I mean, like, does that turn into something? I don't know.

Ryan Sean Adams:
[46:06] Something serious is seemingly happening, I guess. So Swift consensus is going to involve 30 major banks. So they got a lot of names here. HSBC, Bank of America, JP Morgan, Citi, Deutsche Bank, and others. And the aim is to enable real-time 24-7 international transaction using a shared digital ledger. We don't know if this is going to be built on Ethereum mainnet. Like the demo that you're talking about here, this is a sepoilia. It's an EVM Ethereum testnet. But we don't know if that's the final destination or if they're working with consensus, whether it's the consensus is layer two, like Linea or what? It could be something else.

David Hoffman:
[46:46] Maybe it's on JPM's quorum chain. Exactly. It's on quorum.

Ryan Sean Adams:
[46:50] Yeah. You never know with these kind of corporate initiatives, like whether it's real or something else. Actually, David, I want to talk to you about this because we've been talking a lot about stable coins this cycle. And we're getting

David Hoffman:
[47:00] A lot of- A little too much, honestly.

Ryan Sean Adams:
[47:02] Okay. So tell me about this. I saw this headline, Circle exploring reversible USDC transactions in a break from the crypto ethos. This is a Cointelegraph headline. And the president of Circle, Heath Tarbert, Apparently told the Financial Times, we are thinking through whether or not there's the possibility of reversibility of transactions. But at the same time, we want settlement finality. He's talking about reversibility of USDC transactions. Like that's a good user experience type of feature. You know, if someone is scammed and you can kind of reverse a transaction, then you can make the person who was scammed whole. and so the idea of reversibility to usdc transactions in general now this is completely antithetical to the crypto ethos right which is like we're dealing with immutable blockchains and code is law and yet stable coins are this hybrid thing where they follow some crypto rules and they also follow some legal rules but in general i was just thinking like do you think the cypherpunk era if crypto is like dead now that we've gone more mainstream and TradFi is entering and they're starting to be like, oh, you know what would be nice? I love the blockchain thing you guys have going on. But the mutability thing, I don't know. Like how about we just add reversibility to this and make it even better when crypto natives would say,

Ryan Sean Adams:
[48:28] Like immutability is a feature. It's not a bug here. Like what are you doing?

Ryan Sean Adams:
[48:34] What's your overall take on this?

David Hoffman:
[48:36] Yeah. The important thing about a blockchain is that if you want all of the cypherpunk ethos imbued into the product that you use, you have that option. And if you want to strip away all cypherpunk ethos away from that same product, you also have that option. And so is the cypherpunk vision like the ethos dead? It's like, no, it's always been about choice. and comparatively the centralized trusted solutions are faster and easier to deploy and more aggressive and so therefore more mainstream but at least those users have the ability to exit to a more, cypherpunk ethos stablecoin I kind of want someone to just redo the MakerDAO play now that MakerDAO is kind of like it's kind of bent the knee a little bit can somebody just go and redo DM me Say, hey, I'm raising for a startup where it's called MakerDAO. And I would like that. Cap money is like newer stablecoin that I like that has the cypherpunk ethos. Will it ever get to like the billions of dollars that like Circle and Tether are? No. But it has enough capacity to support me and my savings.

Ryan Sean Adams:
[49:50] I feel like we've tried it. We tried many of the crypto-native, like stablecoin type things, and it seems like there's this bifurcation now. There's like real-world assets, and they're going to have some real-world types of limitations, right? Yep. Which is meatspace settled, maybe reversibility. Certainly, the issuers have the ability to freeze and censor and do all of these things. And that's kind of veered towards one side. And then on the other side, we still have all of our crypto-native assets, right? There's still Bitcoin. There's still Ether. Still can't be frozen. Still can't be censored. You know, still is completely immutable. And the middle really has been the thing that hasn't held. And maybe that's just, maybe that's the future. Like maybe there's never going to be a cypherpunk kind of stablecoin that exists. Maybe it's just we have crypto native assets and we have real world stablecoins.

David Hoffman:
[50:40] No, I think there are cypherpunk stablecoins that exist. They just don't exist in like large size. But that's also okay. That's okay. It doesn't need to exist in large size. It just needs to provide its quality service to the people when they need it.

Ryan Sean Adams:
[50:53] I want them to be, I, there was a time.

David Hoffman:
[50:55] Yeah, you want them to be dominant. There was a time in 2019 where, like, cypherpunk ethos is going to be the largest ham. And it's not. That has not happened.

Ryan Sean Adams:
[51:04] But it has. I mean, we have seen our crypto-native assets grow, like Bitcoin above, you know, 2 trillion ETH. Yeah, that's true. Half the billion right now, so.

David Hoffman:
[51:12] Yeah. Coming down to the end of the world, we've got our second-to-last subjects. We're going to talk about ZK really fast, especially with the release of Sam Altman's Sora. Have you played around with Sora, Ryan?

Ryan Sean Adams:
[51:22] No, it's like I can't. I don't have a private invite code. I'm sure we can get one.

David Hoffman:
[51:26] I will get you one. Oh, you have one? I got mine from Ajaz, who is connected with the OpenAI people. Ajaz, one of the two hosts of Limitless. Well, actually, let's just go tap into the Limitless podcast, which everyone should be listening to, so we can download people on Sora.

Ryan Sean Adams:
[51:40] Okay.

David Hoffman:
[51:40] Not Zora, Sora.

Ryan Sean Adams:
[51:42] Yeah, first, what is Sora? It's like AI-generated video from OpenAI, basically. Yeah, it's like Instagram,

David Hoffman:
[51:50] TikTok, except everything is AI, and you can type in your prompt. You can like upload your face and say a few words and then all of a sudden you're in Sora. So you're the actor, which is kind of creepy. Let's go hear the segment from Limitless. In this video that I'm showing on screen right now, someone cameoed Sam Altman shoplifting in Target, right? Oh, can you please turn the audio on for this? This is so good. Oh yeah, absolutely. I want people to hear. Please, I really need this for Sora inference. This video is too good. That's great. I love how we just did a clip inside of a clip.

Ryan Sean Adams:
[52:24] Yeah, it's perfect. Clip section here.

David Hoffman:
[52:27] All right, so on the podcast.

Ryan Sean Adams:
[52:28] How real does this look to you, though?

David Hoffman:
[52:30] It's very real. It's very real. They're showing a clip of a video made by Sora of Sam Altman shoplifting a GPU. And it's Sam Altman. It looks like Sam Altman. It sounds like Sam Altman.

Ryan Sean Adams:
[52:41] It's from the perspective of a security camera in a convenience store, right?

David Hoffman:
[52:46] It just nails it. It just nails it. Which begs the question, when these things get even just marginally better, how are we going to be able to tell what's real and what's not? We're basically there. And it has been a longstanding conversation in the crypto space for years about data authenticity, data provenance. And now that deep fakes are real, crypto has the solution here, right? We can solve this, right?

Ryan Sean Adams:
[53:15] How? How do we solve this?

David Hoffman:
[53:17] Okay, so Uma Roy from Succinct, who's got the ZK Proving Network, she says, Holy shit. Urgency to deploy cryptography at scale just 100x. Provable images, video, and audio will all be integrated into timelines. ZK will power the HTTPS of reality. So Uma's like, oh yeah, we'll use ZK to prove authenticity. And I think conceptually that checks out, but I think also both me and Ryan are like, how? But how? How does that work?

Ryan Sean Adams:
[53:43] Yeah, like, so how? Like I get if you are doing an officially related, like if we're doing the bankless rollup, for example, and we wanted to sign it cryptographically and just say, this is the authentic bankless rollup. And you could tell because David and I have signed it with some private keys, right?

David Hoffman:
[54:01] And we tweeted it out and our Twitter accounts. Yeah, yeah, yeah. But we could tweet out AI and be like, this is real.

Ryan Sean Adams:
[54:09] Exactly. Or somebody else. I mean, that just seems like it's a pretty narrow use case, right? An example of you're catching Sam Altman in a convenience store security camera. Is that the real Sam or not, right? It's not something he would be authenticating. So how does ZK actually do it? It's like, are you putting some sort of ZK timestamp in every security camera, in every iPhone, in every picture you take? I think you need a ZK

David Hoffman:
[54:33] Circuit in cameras and it-

Ryan Sean Adams:
[54:36] On the hardware devices themselves?

David Hoffman:
[54:37] On the hardware, yeah.

Ryan Sean Adams:
[54:38] And it timestamps it and it throws it on a blockchain somewhere so

David Hoffman:
[54:42] It can be audited. And the thing is like if for CCTV like local cameras um, You have to be ZK signing because they just run. They just run 24-7 and they keep like the last 30 days of footage. Is all of that ZK signed? And where are those proofs going?

Ryan Sean Adams:
[54:58] Exactly. This just seems like a massive last mile problem. Like we will solve it and we need to solve it with ZK. That totally seems like the solution. But there's no easy button for this, right? If somebody listening knows more about how practically we can solve this using cryptography or cryptocurrency or blockchains, let us know. Because, I mean, we've known about this for a while.

David Hoffman:
[55:22] That was the entire point of this segment is this call to action. It's like, please help us. We don't understand.

Ryan Sean Adams:
[55:26] There we go. All right. David, do you see this clip? The CEO of Polymarket gets flipped off by the CEO of the CME, the Chicago Mercantile Exchange. Let me set the context for this. So Shane Copeland, he is the founder of Polymarket, of course. He was invited to a panel with a whole bunch of important people. SEC invited him. It's a CFTC roundtable. So ICE, I don't think this is the same ICE. Oh, it's the exchange ICE. NASDAQ, CME, CBOE, we're all there. And so was Shane. He was invited. And this in itself is a big deal because like- It's legitimacy. Less than a year ago, his apartment was being raided by the FBI as kind of an illegal crypto project. And now he's being invited by major regulators to panels like this. Anyway, I'm going to play a clip because at this point in the panel, the CEO of the CME flips him the bird, man. Gives him the middle finger.

David Hoffman:
[56:29] Yeah, okay, but...

Ryan Sean Adams:
[56:31] He deserves shame.

David Hoffman:
[56:32] Shane called him old.

Ryan Sean Adams:
[56:34] All right, let's just play the clip. So users, listeners can decide.

David Hoffman:
[56:38] They want to win on blockchain. And really you're at a fork in the road where, hey, I can either go and wait and lobby and do rulemaking for five years while everything happens offshore. And we're left with consumers having to, you know, work with guys like you who are a lot older, may not, may not.

Ryan Sean Adams:
[56:56] With all due respect. There it is. There it is. Middle finger up. Terrence Stuffy. With all due respect. Guys that are a little older. CME.

David Hoffman:
[57:06] I mean, that was just in good jest. That's just like a funny moment.

Ryan Sean Adams:
[57:09] That's great.

David Hoffman:
[57:10] Young crypto prediction market startup founder disrupting old boomer CME founder. Yeah. He calls them old and boomer flips them off. That's just hilarious.

Ryan Sean Adams:
[57:20] There you go. All right. So I think that's it. I think we're at the end of the rollup, David.

David Hoffman:
[57:25] Yeah, we are. Do you know, there's a three-day weekend coming up, Ryan.

Ryan Sean Adams:
[57:28] That's right. Yeah.

David Hoffman:
[57:29] That's right. Yeah. I'm letting you know and also the listeners know that I will be climbing.

David Hoffman:
[57:36] Oh. I'm climbing. I'm gone.

Ryan Sean Adams:
[57:38] So good things. Last time you climbed, Ethereum hit all-time high. That's right. Yeah. And so- Well, no,

David Hoffman:
[57:43] Last time I didn't climb. I was at Burning Man. Oh, you were at Burning Man.

Ryan Sean Adams:
[57:46] Last time you were out.

David Hoffman:
[57:47] I was off the grid. I'm just letting you know. I'm just letting you know. Do what you will with that information.

Ryan Sean Adams:
[57:51] Okay. I think you're talking about the 13th of October.

David Hoffman:
[57:54] Yes. I disappear on- I leave the 11th and I disappear on the 12th. And I will return on the 14th. There you go. But meanwhile, I'll be on top of map.

Ryan Sean Adams:
[58:03] Place your trades, everybody. Get on those- Everyone place your bets. Purple exchanges go 5X, 10X long on ETH for October 12th.

David Hoffman:
[58:11] On October 12th. This is not financial advice.

Ryan Sean Adams:
[58:15] We do have a moment of zen for people, but I should say, maybe we'll do the disclaimer first. You guys know none of this has been financial advice, but it's risky. You could lose what you put in, but we're headed west.

Ryan Sean Adams:
[58:25] Not for everybody, but we're glad you're with us on the bankless journey. Moment of zen. We've been having this conversation about big banks wanting to edit the genius bill, take away crypto rewards. They want all the interest for themselves. This is a Coinbase parody in response. Enjoy this. See you next week.

David Hoffman:
[58:44] Can we actually take that part out of the Clarity Act? Which part? The part that allows for crypto rewards. We've been working on this bill for months. I know. And we've already signed that part into law. Yes, I know. And now you're trying to undo the law. It sounds so much worse when you put it like that. And you already said allowing crypto rewards was fine with you. I said that? Yes, we definitely talked about how more reward options are better for customers. But, did we talk about the community banks? What about them? Well, I'm worried stablecoins will threaten their bank deposits. Actually, there's no significant link between stablecoin adoption and community bank deposit outflows, so I'm not worried. Think about the community banks. This is about protecting consumers. Really? You can either have crypto rewards or you can protect our monopoly. Sorry, what? Sorry, I meant protection for consumers. Okay, so if crypto rewards are bad for customers, should we also ban your credit card.