ROLLUP: Post-Merge Recap | White House Crypto Regulatory | $160M Wintermute Hack | Do Kwon on the Run?

is this cope Ryan are we coping right now we might be coping do you feel like we're coping I think when people are coping they don't know they're coping and I was about to say no I'm not this is not cope maybe that's what people who are coping say hey Bangla station happy fourth Friday of September David what time is it Ryan it's a bank with Friday weekly roll up where we cover the entire Weekly News in crypto which is always an ambitious Endeavor yet we persevere into the frontier nonetheless every Friday with our morning coffee of course yeah grab a

cup of coffee as you uh hear how David and I struggle through a roll-up post merge post merge David what is there to talk about now that the merge is done content any content bear Market because this is going to be a 20 minute episode here yeah the Roll-Ups are just getting actually yeah even though there's nothing happening I bet you we could find a way to make a 90 minute roll up yeah but you know what there actually is a lot happening because there's always a lot happening in crypto even though we're in a post merge world uh number one we're going to talk about the White House they have some words to say to the

crypto industry this Biden report just came out and I think people need to know is it alarm time should we be freaking out right now what else we got and we have to reset the hack counter there's a 160 million dollar hack and it's never before seen way of getting hacked uh are you at risk uh no you're not uh but it's an interesting story nonetheless so we'll get into that and of course we covered it last week dokwon is he on the Run where is he Ryan do you know where do Quan is because people are looking for him I don't know he says he's not on

the run but I think Interpol has a different uh take on that it sounds like somebody who's on the Run what they would say yeah it does before we get in though David got to talk about our friends and sponsors at Swell who wants you to know that there is going to be a new staking opportunity in town it's called swell Dave and I like these guys so much we're also Angel Investors and they are now in a guarded launch territory so they've started the launch process it's in a guarded launch while

they take care of a few more things but what is swell David why is this a new entrant onto the liquid staking scene and what are these guys specializing in yes well it's really going after the Best of Both Worlds between Lido and rocketpool rocketpool of course the only decentralized permissionless of validating staking as a service pool on ethereum Lido a permission validator set and swell as doing a little of both so you can stake your ether with swell permissionlessly if you put up a 16 eth Bond or you can also be uh in the Dow

and get voted in as a uh as a trusted staking provider and so you get a little bit of light up a little bit of Rocket pool and if you were lydo came around in in 2020 and so if you were too late for both of those things you could still get in at the ground floor of swell so there is a link in the show notes to go and join the Discord and join that community this is promising to be a community owned protocol so go check out the Discord and help them build this thing out David let's get to markets all right Bitcoin what are we looking at on the

Bitcoin price this week can we just get playing this week let's skip the whole no tell us give us the hard truth okay we can hear it we're ready for this Bitcoin not down so bad um it started the week at 19 800 so start of the week below 20 000 ending the week at nineteen thousand dollars a few dollars below nineteen thousand dollars so we are in the 18 000 range down four percent on the week uh not looking so great not looking this is uh not not so great but not so bad typical bear Market week we're at the lows the

Bitcoin like flashed down to 17 and a half during the liquidation and then it popped right back up to 18 000 something we're at the market lows like we're not we're not that far off the bottom there was a liquidation event this week maybe some are saying this is maybe fed caused fed induced we'll talk about that but how about ether we are in a post-merge eth world was Hal press right David was the merch priced in uh so ether down 14 on the week start of the week at 1500 ending the

week just below 1300 uh I guess the merge was priced in I guess it was fully prep the merge execution was priced in yeah you ready to say that I I guess so yeah what's there's no there's no way for me to like twist this I got nothing here do you know your debate with uh Jordy Alexander on whether like the merchants price dinner or not I still like again I'm you know I'm taking the role of the unbiased moderator David so I can't be in your corner I can't be in jordy's corner I have to be unbiased I will say as an

unbiased moderator you're not wrong yet okay maybe Hal press was wrong some of the like the Traders were wrong you were not wrong yet because what I heard you say in that conversation with Jordy was it may not price itself in in the short term you were talking about like post merge you know could take a few weeks a few months but your main argument was in the mid to long run the merge isn't priced in because we have a massively decreasing issuance rate less Supply on

the market all we have to do is refill that demand bucket and then prices shoot back up maybe some Solace there I don't think you're wrong yet I don't think anyone can say that it's a it is pretty much a pretty big bummer to see ether go down 14 immediately post merge I mean definitely one part macro which we're about to talk about also the other thing the the new meta is like all right post merge what the hell is next like when you look over the horizon what do you see about that like there's not there's

not much there so we're gonna talk about that to you do you know what this has cemented for me though David that we are in a bear Market yeah there's all right we are in a bear Market here it's going to be a sustained bear market right so I think there was some hope that this catalyzing event of the eth merge might uh change things spark something wasn't enough nope and this confirms when good news happens during a a market cycle and the price goes down it's generally you know you're in a bear so bear Market

confirmed I think we could be here for months uh I think we'll have to wait until macro takes over and we'll get into some of that story but also there are no big crypto catalysts ahead this is nothing I can really think of beyond the merge yeah so we got that it's gonna be fun times this is a bearish weekly roll up wow it's only like three of those I'm not I'm not really bearish honestly I just think this is the sustaining the bear Market but I'll tell you what did not drop eth price and that was Gensler

comments this week I saw this headline had to bring it up I thought that was an onion article this no this is Yahoo finance this is mainstream Finance reporting and with that with the headline ethereum price drops 20 as SEC declares control over the network wow and we've got a picture of Gary Gensler with his fist in the air dictator King style uh controlling the network I guess as depicted controlling the network so if your friends ask you if Gensler is controlling the network right now and if

that's the reason price dropped bankless is here to say no that's not the reason price dropped and no the sctc didn't declare control over the network Gensler was just saying things that Gensler says often and we'll we'll cover that later but yeah you can't mainst like mainstream reporting of this you can't uh associate the you know the correlation is not causation here so uh anyway moving on let's let's take a look at what actually happened with East Supply because that is a pretty cool story we're actually

not in the ultrasound territory though so maybe that's a bummer but uh tell us what we're looking at here David yeah so we're going to just do a review of The Ether Supply Dynamics post merge uh and you can see that little chart in the center of your screen it is going up and to the right so ether is inflating it's inflating at 0.19 a year which is pretty damn low uh and I see some some bitcoiners and some ethereum bears looking at this chart and be like oh look ether's not ultrasound is not deflationary all the eth people were

wrong um but when you see this chart and you go up and to the right Ryan could you go ahead and hit that simulate pal button on the on the right side so we can see what it otherwise would have now look at that so that white dash line line is what ethereum was previously pre-merge and then the blue line at the very bottom is what it currently is and those are very distinct very different slopes and then Bitcoin is about splitting the difference right in the middle there uh the also the other important thing is that since the merge there has been 4.7 000 ether issued

where there was previously once 13 000 ether issued a day since merge there has been a net total issuance of 4.7 000 ether issued if we were still in proof of work we would have otherwise issued about 93 and a half thousand ether so that is a net issue introduction of 88 000 ether that has not been issued since the merge has gone in a total sum about 14 million dollars uh forty million dollars not insignificant and how long is it has it been since the merge about

seven days right yeah it's been seven days and this is the thing David just just one week into this and ether is not ultrasound post merge on a one week basis but of course it can always catch up right two weeks from now three weeks from now maybe months later and um the the next Bull Run for example takes uh issuance down and deep into the negative territory and makes up for this but for people who couldn't see the lines that you're pointing to you eth was issuing or would have been issuing over the past seven days three point seven eight

percent and to your point it was actually only 0.19 and that was get that was as a result of the merge so the difference being we uh issued 4 700 eth with proof of work we would have been issuing 93.5 big difference there big big difference in the numbers it's also worth noting that when gas is like basically on its floor right now right at seven way if we had like a 50 Gray 24-hour period that makes up for like

three days of net inflation right and so the amount of burn can is uncapped and so you can burn like seven days worth of inflation inside of a very small amount of time and so as soon as you get out of like the depressed bear Market era of gas fees like you can make up a lot of lost ground in a very short amount of time um is this cope Ryan are we coping right now now I might be coping do you feel like we're coping I think when people are coping they don't know they're coping and I was about to say no I'm not this is not code maybe that's what

people who are coping say um honestly I'm not that worried about this like you should only be worried about this in my opinion if you think block space demand will never recover on ethereum well if you think block space demand will never recover you are also thinking crypto is not a thing those are synonymous statements right so I to me like it does not compute it's not compatible like that doesn't work because uh I mean and if if bankless has a fault maybe we have more than one

fault David but our fault is that we are Perma Bulls right on this industry and on crypto not over short term one-week time periods okay year long decade-long time periods uh and um yeah it's incompatible to me to be short blocks based demand in that environment but how does each stack up ethereum that is stack up in issuance versus other networks right now that'd be a cool thing to see yeah this is where the ultrasound meme really really takes hold so Bitcoin currently issuing at 1.75

which is issuing 17 million dollars a day Dogecoin coming in and this is in in terms of dollars or the more dollars you're issuing that you come first Dogecoin is the new number two daily issuer in U.S dollar terms inflating at 3.6 percent almost a 0.8 million dollars a day coming in third is ethereum at 0.15 percent issuing seven hundred thousand dollars a day of of currency and so like the the 0.15 percent

issuance rate is such a clear juxtaposition on every other like highly issuing money uh currency in in this base like cardano 1.3 Litecoin one point three point seven percent I don't know where Avalanche or Solana is on this sometimes uh the David mihow Gets a bug and he does it like Avalanche is like at eight percent like yeah it's like these are Big differences these are huge numbers yeah I uh I do think all of this will catch up to the price of eth but

eventually overnight eventually um a few things with respect to staking rewards uh I saw this from our Network newsletter this was very interesting look at this portion of consensus rewards which are basically block rewards versus execution rewards so post merge the rewards to validators uh saw an increase of 172 percent so definitely went up not as high as some people were saying I saw numbers around like like the high 5.9s to to six

um percent apy something like that I mean there was the hope during the the bull run if you use the the Bull Run block like block space demand then you get like double digits uh staking yield um we haven't seen that we're not likely to see that anytime soon but six percent not too bad and um more than half of that is coming from me e and transaction fees rather than pure block space reward one of my favorite things about just the post merge world is how many more metrics there are to look at like

there's just so many numbers to talk about as a Content producer I enjoy it yes we we will not run out of content that's for sure um knock on wood okay so this is mevboost.org which is a new website that's very very useful this is all about the block building side of the equation uh and so just a quick recap there's block proposers AKA eth stakers people are staking their eth and sometimes they want to Outsource the role of building a block they are for whatever reasons usually monetary they

will say hey someone serve me a block and I will propose that block rather than building that block myself because if you block building is a skill it's a competition Vector for people to compete on and there are new block builders on the scenes these are new entities in the supply chain of building an ethereum block so there's flash bots of course there's a blocks route there's block native manifold and Eden these are all block Builders and they are specializing in how to extract as much Mev out of the block as possible but then there's also things like block route ethical which is

only extracting ethical Mev so no sandwich attacks and no other militia stuff there's also blocks routes regulated if you you choose to be ovac compliant you can have the regulated block served to you and these are all these entities are all competing as to how profitable they can build you a block so flashboss is by far the most used block Builder it's it's built almost 10 000 blocks so far producing almost 2 000 ether in rewards for people that have used flashbots that's a block

Builder coming in at an average block value of 0.193 ether per block and then you know all of these people are competing on various vectors as to how to make the average block the most profitable coming in first block native at .23 ether per block is the most uh the best block Builder so far in the game but is so so early in this brand new world of block building uh that uh that we will see manifold the one that

Ryan is highlighting is a special case they are integrating with certain D5 apps Sushi swap which is why they have only proposed a very low number of blocks 63 but their average block value is 0.6 right that's their deal they are low numbers of block proposers but high value per block yeah what's interesting to me is like um okay so relayers and block Builders they just got jobs on the network they're newly employed and this is the same time we said to all of the

miners on the ethereum network thank you for your service your services are no longer needed we will escort you to your vehicle right and like miners left has ended and now we knew have news but thank you thank you though for your service we have relayers and we have Builders as well and the Builder Market is actually like um it's actually fairly diverse like there are a number of different um block builders that are gaining some market share uh on the relayer side of things that's that's been interesting because if you run an actual validating node like David and myself so you set up

your validating node and then you get to pick which block Builder which block relayer you actually want and you can pick based on your values so I want maybe an ethical box yeah a builder and relayer you can render yeah grass-fed organic or you can pick maybe something that is in super compliant maybe the over complier block Builder like block uh blocks are out regulated you actually get to choose these things now Dave and I had a conversation with a vitalik

earlier this week and he made the point that there are protocol upgrades coming down the pipeline that will actually nullify the need for relayers and so we'll always have block Builders but not relayers which is good because relayers can represent a censorship Vector anyway more on that centralization Vector too yes yes a centralization censorship Vector more on that episode if you listen to it that's coming out on Monday but to your point David there are so many more numbers to look at and the ecosystem has just gotten that much more

interesting with with these new relayers and build others entering the network all right well ethereum is building blocks the FED is Raising interest rates maybe Jerome Powell is the guy we have to thank for the lower crypto prices this week the FED just went big again this is their third straight three-quarter Point rate hike so 0.75 750 basis points up this was anticipated I think by the market this is uh of course you know Powell has been

signaling this for a while and uh in his comments he actually signaled more to come so the comments I think were a bit more hawkish than analysts thought quotes like this the chances of a soft Landing are likely to diminish to the extent that policy needs to be more restrictive or restrictive for longer that's what he said he also said no one knows whether this process will lead to a recession or if so how significant that recession would be not as much talk

of soft Landing in this discussion talk of maybe estimations of maybe a 0.75 rate hike again in November followed by another half a percent in December all right so we are going up my friend interest rates are rising the FED is really serious about breaking the back of inflation so we are now between uh the new target range of three to three point two five percent from an interest

rate perspective so that happened this week and of course markets risk on assets tumbled as a result yeah sick I mean okay so we we merge we look beyond the merge and we see nothing and then the FED says oh you know you want someone to look forward to rate hikes and that actually I feel like it does a pretty good job explaining the price action over the last seven days oh yeah you think Powell was like he saw the merch he's like you guys are too happy uh take this you think that's what happened yeah he's got it out for us

yeah that's probably what happened all right so like when the hell is the pivot I was promised a pivot uh I thought like you know maybe election time pivot post post November pivot isn't that November of 2023 no there's the midterms are coming up mid terms oh midterm election okay yeah we've got midterms okay well whatever I don't know anything but like I I was always under the impression that the FED can't raise the interest rates all that much without like bankrupting the United States so

wins the bankruptcy happened we're doing it bankruptcy not not at these rates I mean there have been lots of people like um uh Dan Moorhead from Pantera Capital he's like hey the FED has to raise at least five to six percent and they should be doing it now and this is more on kind of the aggressive side and like they have to do it in order to be sustainable so different macro people have different perspectives on this but the line that no one knows whether this process will lead to a recession or not uh or how significant that recession would be kind of freaks me out because

they their policy on the other side of things like I said last week their policy on the other side of things were like oh we'll just issue money like inflation is transitory we don't know it's like okay sick now we're going in the other direction but here's the thing of course we know that like high inflation is not politically tenable neither are recessions yeah those in power right so you kind of want to thread the needle and get the balance right and right now Powell is in the mood to take a hawkish stance on things but I'll tell you the prices of something is going up and that is the

price of a 30-year mortgage rate in the U.S now this is raised to more than six percent for the first time since November 2008 so I have never seen rates in my kind of looking at homes a lifetime I've never seen interest rates this High not even close and they're still increasing which is crazy and if you want to look at how this looks to an average home buyer here's a a tweet the average 30-year mortgage is up from 2.7

percent to 6.3 percent we've got a doubling and that means monthly payments on a five hundred thousand dollar loan last year that's a home payment was two thousand and thirty dollars monthly payments now three thousand one hundred dollars housing prices are down six percent in one month and that is the biggest drop since 2011 this tweet ends recession is an understatement so how much can you keep cranking the vice grip here David before other things break and

that's what you know macro analysts like Jim Bianco have been telling us all along they will continue to hike until something breaks or how is the housing market the next thing to break I'm not sure we're looking at you know Bonds in Japan these are other things like not sure when the next thing to break is but um Powell and the FED seem determined to continue this strategy of tightening yeah I can't can't tell if like people that bought a house at the peak of the bull market like in 2021 where are did they buy the top of the housing market yet also the bottom of the of the

interest rates of the uh of the mortgage rates because at the same time so like prices are down from all-time Highs but also interest rates are up so like was it a good deal or was it not nice to be locked in right now to like a 2.7 percent fixed loan 30-year fixed loan uh what a gift that is in these yeah but your house is down six percent in a month so you know like pick your pick your poison yeah you can't get everything but if you want some comforting words uh Powell has some words on Shelter uh he said this I think that shelter inflation is going to remain high for

some time we're looking for it to come down but it's not exactly clear when that will happen it may take some time here's this one's for you David hope for the best plan for the worst Powell said there you go I don't feel comforted by that at all hope for the best plan for the worst uh this is Stanley druckenmiller not much more good news and what he's saying this is a video quote from an interview series he did he said there's a high probability in my mind that the market at best is going to be kind of flat for 10 years sort of like 1966 to the 1982 time period

that's not a favorable time in American history with respect to like the prices of stocks and equities markets and that sort of thing that is a huge take 10 years of flat yeah oh so I mean I don't know what this all means right but like I I think one thing that we're seeing of course is like when prices go down when it seems like there's bad news on the week or on the month then things like this drucken Miller quotes surface right who knows how long he's been

saying this um who knows how long other investors have been kind of saying this so uh there there is kind of an information bias when it comes to bad news always gets magnified during bad weeks in the market I think that's at play um but the question remains I think what would crypto do in a flat 10-year period is that going to happen and if it does happen for equities what does that mean for crypto as an asset class I'm not

really sure how to how to weight these how to understand them but I think it's more content we should do on Bank list to figure that out the answer would I want crypto to do during that time I mean of course I want that the answer to be to go up but that's you know you can't ask for that obviously what I wanted to do is decouple do something else like do something different and like maybe that's that's how this like bear Market slowly plays out is like the you know this s p Market which moves slower than crypto markets crabs for 10

years but then four to five years into it we have just another classic growing season in the crypto world uh that's maybe that's what you want to happen David yeah I wanted to decouple sometime later later in the conversation drucken Miller did say like during the 1970s was it was a good time for many companies I mean that was the time when Apple was founded for example Home Depot was founded and of course we we do know that crypto markets tend to move much faster than traditional markets so the pain is more severe the dips are shorter in

general uh but yeah we'll have to see this could be Uncharted Territory David what do we have coming up next coming up next the White House has some words for us in the crypto industry is it time to sound the alarm we'll figure that out uh 60 160 million dollar hack gotta reset the counter on that one and what's next now that the merge is behind us what are we going to talk about what's the new meta is there what's the new narrative can we create one uh because uh there's definitely content bear Market going on so all of that and more right after we talked to

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bunch of branches in the White House to go and investigate crypto and this is the report this is what they came back with David what's some of the summary from this report now there's just different headlines different goals that this report wants to see it out of the crypto industry coming in at number one protecting consumers investors and businesses which yeah I mean I guess that makes sense to lead with especially coming from the White House who are trying to protect their citizens uh this is no secret that crypto is full of scams and exploits and

hacks uh how the White House and how the government plans to solve that problem uh curious to see anyways that's number one a number two promoting access to financial services number three fostering Financial stability for advancing responsible Innovation five reinforcing the country's Global Financial leadership and competitive competitiveness six fighting illicit Finance anti-money laundering counterfeit financing of terrorism et cetera and seven exploring a U.S Central Bank digital currency I don't know how

much I should read into the ordering of these things but it would make sense that the White House would put protecting consumers first so that's like let's not do things like algorithmic stable coins let's not promote scams um interesting that number seven blast is the cbdc which definitely tracks with all the other institutions or like government institutions out there that are like oh we'll research and talk about yeah think about it let's think about like talk about it yeah

um what are your takes on this yeah so when I read this David I guess a few things like stood out for me like just some keywords like if you did a keyword search there were a lot of like words that connote danger or risk or elicit finance and there's also some some CBBC even though there's a section about um competitiveness in American protecting Innovation like there wasn't a lot of meat on the bone in the in those sections and so for me this report was pretty bearish now I didn't go into