ROLLUP: Base Kicks-Off Onchain Summer

I think that we will look back and see the reason for why we had a bull market in 2024 and 2025.

What's that reason? Layer twos?

Base, Coinbase, specifically putting all of its marketing and weight behind a base layer two because they are, like I said, printing money on it, but they are going to take Ethereum layer two, specifically base, because they now have the incentive.

Bankless Nation, it is the second Friday of August. David, what time is it?

Uh I'm doing great, man. I've got my uh I've got my coffee. We've got our stable coins going. Um some big news this week. PayPal launched a stable coin on Ethereum. I think that's a big freaking deal.

Yeah.

Yeah. What else are we talking about?

Base gets dropped with already a hundred and five million dollars in total value locked. Kicking off on chain summer. Coinbase just putting all of their weight behind the base launch. And so we're gonna talk about all those details and more. And then something out of Arbitrum. Tell us about Arbitrum.

Yeah, they got a little bit more decentralized, at least they're preparing to. So we gotta cover that with their bold new proposal, David. Do you like that one? Bold.

You did it in the show. You can't c

I can keep doing it. This is a different show. I get one per show. Also, Polygon

last time.

Whatever, let's move on. Polygon and ZK Sync, they are throwing some punches back and forth, at least on Twitter. We gotta talk about that. Uh there's been some wallet UX breakthroughs, I feel like, recently. This is making me pretty bullish, so we'll talk about that. The SEC isn't done yet. They are striking back, and lastly,

David, is Joe Biden a bit coiner? What?

Words I never thought I'd see really.

We'll talk about that too. Uh before we get in, we've got a message from our friends and sponsors. What's cracking, my friend? Open up the cracking charts. Yeah, it's become a thing. I'm doing it. Uh let's see what's cracking with Bitcoin USD on the price charts.

Well, nothing is cracking, Ryan, because we're only up half a percent. Nine twenty nine thousand three hundred ending at twenty-nine thousand four hundred, a hundred dollars in Bitcoin. It's not much. Um so

are you bored?

You know, the thing is, like, I would be bored, except for how incredibly good the news cycle is. Like the innovations, like it is there is a huge decoupling disconnect between what is going on with announcements and innovation and the foundations, the fundamentals, if you will, and the actual prices. And so people are getting frustrated about like PayPal, they just dropped a stable coin on pay on Ethereum and it didn't even move the price. What's it? Don't be frustrated by that. That is alpha.

Let's look at it. No price movement here. This is the

So

uh price on the week. What are we at? Are we flat?

eighteen hundred forty three dollars to eighteen hundred fifty dollars. We went up seven dollars.

What? It's flatter than a pancake. I used that like

Yeah.

a sheet of paper. That's how flat we are on the on the week. Don't even ask me about the ratio.

Oh it's flat.

Uh next you're gonna tell me the gr global cryptocurrency market was last flat.

It's one point two trillion dollars.

You know what's not flat though? Two things.

Yes?

Layer two TVL and layer two scaling factor is up.

Uh

so we get to cover these in our market section every week from now on.

We have added this to the template. Layer like total value locked on layer twos coming in at ten point five seven billion dollars. Break working through that ten billion amount.

So because we are adding something to the template, David, I feel like we have to explain these metrics. First time. Bankless Nation, you only get this one time explanation, and then every single time you're expected to know it. You're expected to know it, okay? So, what is total value locked in layer two? Why are we looking at this chart on a weekly basis? Forever and more.

Yeah, TVL kind of the same thing as AUM assets under management. It's just like how what is the total market cap of assets that are deposited onto layer twos? And if you aggregate all of that together on all layer twos on Ethereum, you come up to $10.57 million. Well, actually, technically it is flat. It's up half a percent over the last seven days, but it's been incrementally growing for all this entire bear market. Um the other thing that we're gonna look at is scaling factor. Uh so if you hit the act uh activity tab on the right, you see a scaling factor of 4.8x, 4.83x. That is uh how many more Ethereums all aggregate layer two economic activity is adding. So on layer twos, there are 4.8 Ethereums worth of economic activity happening that are settling to the Ethereum layer one, which you know is one Ethereum. Pop quiz, Ryan. Um, how many m how many times larger is the Ethereum layer one in 2023 versus 2015? How many more Ethereums is 2023 Ethereum versus 2015 Ethereum?

Are you just talking about kind of like ignore the L

Ignoring the layer twos. Just just the scalability of the layer one. Because the reason why I'm asking this is I don't actually think people appreciate that the Ethereum layer one also scales. And so that is a shifting number. So when we say there's a scaling factor of point four point eight X uh layer twos to the layer one, well the layer one is also growing as well.

I bet the layer one on its own and and these are through uh primal primarily um client optimization. So, you know, the team over at Geth, uh, for example, doing a lot of work to kind of optimize um how fast geth can run. And um, you know, there there's some juice to squeeze there versus 2015. That's correct. I'm gonna say um three to four X

from 2015.

Pretty good. The answer is 6X. So Ethereum better than

Than I thought.

Ethereum throughput from 2015 to 2023 is six times larger than it once was. And like you said, this is layer one client um improvements, uh networking improvements, um, just bandwidth, just hardware. Uh as hardware gets better, the Ethereum layer one is actually allowed to increase in scale conservatively, because that's our philosophy. But uh over time, the block size, the data throughput of Ethereum has gone about 6x from 2015 to 2023. And layer twos are 4.5x times on top of that, and they are not even at max capacity now.

So we are at like between twenty four and thirty X if you multiply that all to g

Yeah, if you compare to twenty fifteen, but like twenty fifteen was like primitive, primitive era. Stone age Stone Age in crypto.

Yeah, we didn't have much to do on chain, just like some

Remember remember Peepeth.

I do remember peep it. Alright, but those are the um stats we're gonna go over on a weekly basis. So scaling factor 4.83 X. Remember that number, and assets in uh locked inside of layer two is ten point five billion dollars. Well, let's uh peep it outside of the crypto markets here, David. No problem and go into the traditional markets. Inflation rose 3.2% in July. That's the year over year. And of course, I'm talking about inflation of the dollar. I'm not talking about uh inflation of ETH because that's deflationary, of course. Uh this is a small uptick from 3% in in June. So it's 3% in June, uh 3.2%. This commentator is saying this is good news that inflation rose a modest 0.2% for the month of July alone. That's an encouraging sign that inflation is moderating. So inflation moderating is one of the takes here. Uh, this is the stat kind of over time, and this is uh annualized, so you can kind of see this. Let me look at a different view. See this? This is all the way back from five years ago, uh, where we used to be under 2%, around 2%. That's where the Fed likes it. And then, of course, COVID cranked us all the way up over to nine percent or so, and now we are back down, but there's a little look at this little bump. Looks like we're going up.

Things go up, things things go down. If you if you teleported me back to the peak of that inflation back when we were at nine percent and then you showed me what the future curve would look like, I'd be like, Wow,

This is good.

that's best case scenario.

Soft landing is what you is that what you see here?

That sounds like successful manipulation of our economy.

Manipulation of our economy. Yeah, it's going to be interesting to see. Of course, this is not exactly what the Fed wants, but it's pretty close. So we'll see what the uh August numbers look like. I also think, David, this number is going to get increasingly political. Why? Because the US gets increasingly political during election season. Right? Every four years. So we're we're uh creeping up to 2024 in a presidential election. So some people are gonna say this is a this number's too high, others are gonna say it's it's it's too low. Um what the Fed says is a good question. I I think there's also this debate of um you know, does money printing actually cause uh inflation? Because what we're seeing right now is I don't know if you saw the headlines this week, you know, the US is at a $1.8 trillion budget deficit as fiscal government spending this year, right? So that's a lot of spend going into the economy all the while the Fed is uh is tightening. And some of that spend goes to like interest payments, that kind of thing. Um, so you know, to be to be determined on what uh inflation where that goes next. One one thing I will say is it it does seem like asset inflation is continuing to rise uh as always. So there you go. Um another thing I wanted to mention in this part of the market, David. This is your quarterly reminder that Home Depot, you know, the stock price of Home Depot is actually higher than the total market cap of Ethereum right now. I saw this, uh apparently I said this back in May because it blew my mind when I was looking at the largest assets by market cap, and Ethereum was trailing um Home Depot. I think Home Depot has seen it number two. Hey, Home Depot. Nestle as well. It's below Nestle, it's below Mercury.

Water. So that's that's uh Adobe

Yeah.

Bank of America

All of these things are worth more than Ether right now.

Platinum is higher than ether.