📺 ROLLUP: Beeple NFTs | EIP1559 | Stimulus Checks | GBTC

bankless nation happy second week of march this is your roll up david what are we doing today we are rolling up the second week of march it's always an ambitious endeavor in the world of crypto to condense a full week of news into as short of time period as possible and this is what we try and get done on the weekly rollups we talk about the markets what has happened in the last week of the markets we go into news what got what is in the news cycle in the last week and then we go into releases what got released in the last week and then we finish up with some eco system takes who had some good opinions in the

last week of crypto and then we go into what david and ryan are excited about and last and my personal favorite the meme of the week to finish things off yup you come for the roll up you stay for the meme that's how it goes david you ready to get into the roll up let's roll it up ryan all right man hey before we do one thing we should mention to our listeners is that consensus is having a conference this is a bull market conference and there's only like five more days i think by the time you listen to this it might be four more days to get a ticket at a reduced price with a

bankless code you can get that for 79 so make sure you check that out i will be going david ray dalio is going to be there you know what if he announced he was buying bitcoin at this conference i'm not saying that's going to happen but like what if you know you want to be there for that i want to be there for that you know it's more likely that he would because he's going right like why would ray dalio go to a crypto conference if he isn't intrinsically interested in crypto question mark wow this is how rumors start we don't know guys of course but check out that conference

gonna be a lot of fun david let's get to markets what is bitcoin telling us this week it's not telling us that ray dalio purchased but it's telling us something good i have a feeling what's the price yeah bitcoin is really pushing again up a previous up against a previous all-time high it is at 57 474. what is that previous all-time high ryan if you uh go out into the longer time frames i think it's something like 58 something thousand dollars we we have oh there it is really close yeah there it is we're really close to

the peak there so we we're almost climbing over 58 000 and we are just under that uh just a one more thousand dollar pump out of bitcoin and we could be seeing bitcoin all-time highs once again ether is not doing us any favors this week it's you know it's just hanging it's just hanging under 2 000. i'm going to celebrate that eth 2k again but not going to be this week where are we at and what's going on yeah ether price i think it's moving up off the floor pretty strongly struggling to keep itself above eighteen

hundred dollars at the time of recording seventeen and a hundred dollars not i always mess that up one hundred and seven one thousand seven hundred and ninety six dollars is the easiest price uh and i i think it's in a little bit of a holding pattern but we are definitely uh moving up to two thousand dollars 4k by may question mark 4k 4k by mate well look your last call of it won't drop below 1300 kind of held so congrats on that perfectly held it went down to 1297

and then just got right back up there it did not like the 1200s sir sign me up for your hedge fund sir when you found that david's making the calls here all right let's we'll make some calls we've got uh total locked in d5 that is hold and steady as well over 40 billion though that's a lot locked in d5 anything you want to say about that or should we uh skip to uh dpi more d5 protocols more assets deposited into d5 protocols eventually we are going to resume this climb up this mountain and you know next up 100

billion dollars maybe i'm just a permabull you know what you are a permabull but it was crazy to me do you remember we had that conversation with vance from framework like way back over the summer and he was predicting total locked value and he said something like 100 billion would be like the low estimate of total locked value and now here we are at close to 50 billion right well done vance another guy who could you should start a fun with vance david fantastic uh podcast episode uh the bowl case for defy uh a hundred billion dollars locked in defy at the time of

recording was a little bit absurd but now we're only a little bit over a doubling away from that and there's so much left in this bull market too dude our our previous podcasts were fire like if you listen to those even like um the bulk case for nfts has held up very strongly we recorded that back in the fall uh anyway go check out bagless archive you guys can see some of those predictions bank list doesn't age i dare any listeners to go and find something that has aged poorly i dare you wow someone will now so you

just uh you just taunted all of twitter um all right tell us about dpi that's at 450. so once again this is the d5 pulse index we talk about it every week because it's important these are the top 10 d5 protocols we're hanging out at 455 or so um a little up on the week actually not bad yep started ended last week at 420 dollars now we are at 455 dollars in the d5 index again slow

slow march up and to the right for the defy index let's look at it versus ether ryan all right here we are at dpi versus eth point two five one dpi for verse eth um and we are seeing that channel play out in the longer time frames dpi versus eth over the course of 2021 doing a really good job of staying in a channel uh down versus eth on the week but still in that upwards trend up and to the right and again dpi versus eth is the indication that people are being risk on

ryan's having trouble getting it sorry he doesn't look at the charts look man i'm a long time long term permabull so i don't care what's going on in the minute by minute david but like what is this telling us are we still in defy season yeah we are still in defy season go ahead and hit that uh year to date ytd in the bottom left corner and we can see what it's been looking like there we go uh yeah so again a local local down in the last week but in that solid up into the right trend very good okay um

let's talk a little bit about this dashboard we like showing dashboards we like showing data in the market section this is the mev explorer you're gonna have to explain this minor extractable value is what mev stands for what is it why is it important it looks like it's going up but unlike our other numbers going up has been a good thing this is not necessarily a good thing we don't necessarily want this number to go up get into this for us david yeah it's a nuanced conversation i wouldn't say that mev is exclusively a bad thing but if

it's unanswered for or unaccounted for it definitely can really mess with your blockchain a minor extractable value is the value that you can extract if you are a person that has the right to order transactions and in proof of work those are the miners right so miners are collecting transactions throughout the ecosystem when you broadcast a transaction it goes into what is called the mempool which is where all the miners listen to and they start pulling out of all the transactions with the highest gas fees and then they include them in a block but what sophisticated

miners can do is they can order transactions as they see fit to maximize their own returns because they also get to inject their own transactions as well right and so miners can tinker with trades if people are putting in trades into uniswap usdc for dot for dye or ether or whatever miners can take that spread between the input and the output of those trades and they can take that for themselves because they're the ones ordering the transactions and we see this in bidding wars when bots try and arbitrage

or compete for the rights to make to take this spread and what ultimately happens is that these arbitrage just bid up the value of the gas and into up to the value of the transaction that they would have received right and so if through an arbitrage trade that they would have gotten a hundred dollars they'll build up to 99 worth of gas so ultimately just goes to the miners and this can be destabilizing for a blockchain if if a block in ethereum gets mined and it has a hundred each worth of fees well ethereum only issues two ease per block and so ethereum the

blockchain won't be stable for 50 more blocks until the issuance of ether catches up with the fees issued by that one block now eip1559 is a fantastic mitigator of this but there are plenty of other things to be concerned about because this is a destabilizing event for for blockchains and why this is in markets is that this is an important metric that people need that is not found in legacy in legacy finance this is not something that has correlates i guess you we could talk about like the extremely high frequency

yeah exactly one correlate i would say is sort of the flash boys high frequency traders who who literally park their servers like as close as possible next to the nasdaq servers and and have an advantage that way by getting their orders in before everybody else this is right somewhat similar to that right that's exactly right right except now now that now there's a new party uh now it's the miners or in the future this is the proof-of-stake validators um and and this is going to be a metric that traditional finance is going to first be intimidated about but i think

will really increasingly come to love because of how much rich data amongst other things is provided to them through this metric and so this is going paying attention to mev is going to be a decades-long experiment and it's going to be one of the most fascinating economic experience experiments that humans have ever gone through yeah it'll it'll follow us too in this multi-chain future it'll follow us to layer two when layer two um validators have the ability to reorder transactions we'll see mev there so it's it's something kind of i guess pernicious in some ways it's

something that we definitely have to to monitor is though it's harnessable it can be used for good um anyway we've talked about it a lot enough but we'll look at this metric from time to time in the weekly rollup i think the key takeaway is it's going up it's going miners are finding ways to extract value out of reordering transactions and and we should continue to monitor that in the future mev is a double-edged sword and it's up to consensus mechanism designers mechanism designers to make sure that that sword is a weapon for good not for bad

let's slay moloch with that sword shall we sir indeed all right um david this is an interesting take to take by stani from ave is defy undervalued well coinbase is worth a hundred billion dollars that valuation demonstrates maybe how undervalued defy is look david if you compare the coinbase valuation right now it's a hundred billion hasn't hasn't released its ipo yet it will but this is what it's trading for on secondary like prediction type markets right so it's a fairly good proxy 100

billion dollars one crypto bank all of d5 put together david you know how much that is how much i'll tell you 85 billion it's less all of d5 is worth less than one single solitary crypto bank the interesting thing is the aggregators tokens is that how we measure it yes aggregate of d5 tokens right now so total value of d5 is about 85 billion market cap according to coin gecko valuation of one crypto bank 100 billion feels to me like defy has a long ways to catch up maybe it's

undervalued at this point and if you look at the banking global banking system right now uh global banking market cap lucas from our team put this together 6.2 trillion dollars whereas the market cap of d5 is only 85 billion so we are very early on is the point one thing i'd like to say about this is um d5 tokens don't have the overhead that coinbase is in traditional banks have david right like they don't have offices they don't have many employees

like a t unit swap is a team of like 15 people compared to coinbase which employs you know thousands and then big banks like crypto like jp morgan they're employing tens of thousands right so um market cap has got to flip it at some point too we are in the early days and he takes here yeah i think the reason why coinbase is valued at such a high level versus defy is because defy is harder to understand than coinbase and a constant theme that we talked about on bankless is it's bullish to be understood and people are understanding

coinbase sooner than they are understanding defy and that is my explanation for the discrepancy between these two uh these two evaluations and that's also the alpha that bankless listeners should be paying attention to because if you understand d5 you can be bullish on it and express that and if hopefully we're right cross our fingers but like the discrepancy between these two things should definitely not just equalize uh another reference to van spencer's podcast with us the bold case for d5 is that people that build d5 protocols

they're not going for the typical c-corp you know a public ipo valuation they are going for many hundreds of billions if not trillions of dollars worth of value created and there's no way that that equates in the legacy world we are trying to create something substantially new and value generative and the valuations of d5 protocols at maturity should be orders of magnitude larger than the typical company ipo on the stock market david's bullish d5 may be undervalued

you know it's up to you to use these protocols and determine for yourself that's part of the bankless journey as well don't just take our word for it go use this stuff and see for yourself uh david let's skip to this we mentioned this last time on the roll-ups but um grayscale is still this is the gbtc product and the eth e product they are still trading under nav and traditionally when we've talked about these products these of course can be purchased in traditional brokerages like fidelity you can buy gbtc that is not

actual bitcoin it's a trust it's a proxy for bitcoin it comes with its own management fees but it's always traded over spot same thing with e it's always traded for more than the value of its underlying no longer david now last week it's trading for uh 15 below spot price of bitcoin um i asked crypto twitter like what's going on here because we talked a little bit about it uh but like last time but um we didn't talk about it in detail and david you

know the most interesting and i got a lot of different answers some people are trying to figure out what's going on but the most interesting answer uh to me was that actually gbtc is facing some competition these days okay so microstrategy what is that well that's a stock that you can buy in your fidelity account that can be a proxy for the price of bitcoin there's rumors of etfs on the horizon there's increasing competitive pressure on gpdc

and so it is trading at a discount uh as a result of this this increase in competition so net david i feel like that's a good thing for the space like we want competitive pressures um for these these proxy financial products and you know the thing we want most of all david is we want the sec to let retail get access to an etf because it's a complete rip-off right now and all they have to do is hit that button to approve and they've been holding back all this time

uh gets me upset every time i talk about it any takes here yeah there's a huge story here i think what my opinion as to why this uh this the premium is below the the nav as in like when you buy something uh you buy one bitcoin's worth of value you actually only get 85 percent worth of a bitcoin because of grayscale the people have been arbitraging the grayscale premium for forever and there's a certain there is a six months commitment that you must do and so when you deposit your bitcoin into grayscale with the intention of generating of

capturing that premium so previously the the gbtc premium was 50 over navs meaning that uh the the value of the market cap of gptc was 50 higher than the bitcoin that was backing it the reason why this premium was so high because of demand people wanted it and so people come in submit their bitcoin and then in six months because of the rules of regulation six months they would be able to turn their one bitcoin into 1.5 bitcoins worth of gbtc sell that on the open market and it's four dollars take those dollars and buy 1.5

bitcoin so you magically prove turned one bitcoin into 1.5 this has been a massive arbitrage opportunity for so many companies and it my opinion is it got flooded too many people tried to take the same premium and as a result people when they sell gbtc they push the pressure down and it's a really sad story for the typical uninformed retail investor who wants to go buy bitcoin in in their brokerage in the ways that they are comfortable with and they buy gbtc at 150 premium and now it's 15 below the

value of bitcoin meanwhile actual bitcoin has gone up and so during times where actual bitcoin holders have made money gbtc holders have lost money and this is the fault of the sec not grayscale in the slightest it is the sec's fault for not protecting consumers by approving an etf this is what an etf is supposed to do and instead we have these shitty inefficient mechanisms to try and get bitcoin exposure just approve the etf come on let's get this

done it's really it's causing the ripoff like a mass ripoff of retail investors and it's really a shame absolutely uh i'm sure there's tons of people from the sec listening to this right now that heard that message david and are rushing to approve the etf just do it david david says so david wants it look retail wants it uh it's very clear from a demand perspective dave the last thing we should mention is our favorite git coin grant organization uh this is a

grant organization funding public goods on ethereum they have just launched their latest grant running uh grant they just watched their latest grant funding round that is hard to say uh and there's a matching process here tell us about that and how folks can get involved yeah git coin is a beloved platform of the ethereum ecosystem bitcoin i consider a public good but it's importantly distinct from typical public goods because it is a public good that funds other public goods and what

is ethereum other than a layer of hosting public goods of money and finance on the internet and so using bitcoin is really important and so if you like something if you like to use an application or a protocol and you would want to help fund that git coin grants is for you the cool thing about bitcoin grants is that your dollar is amplified right and so if you use something for free but you would like to contribute value to it you can donate a dollar and because of quadratic funding which is something that everyone listening should be familiar with i think it's a little

bit too much to explain all the details about but i'll do my best is that there is outsize matching and so if you donate one dollar you could get matched up to ten dollars or a hundred dollars and how much you are matched by is determined by how many other unique people are also donating to the same thing that you are donating it's a very clever mechanism and it's a way to fund things on ethereum that otherwise wouldn't have gotten funded so if you like to use stuff in ethereum either protocols or you want to see protocols um built out last last uh bitcoin grant i donated to

tornado cash because i want privacy on ethereum i also am going to intend on donating to connex network this pro at this cycle because i want that l2 liquidity mesh network to be built out if you believe in something donate to it now's the time you've probably made a decent amount of money in the last few months throw a few dollars at get coin yep every dollar depending on the project you fund could be worth like we're not talking small amounts a dollar and you get twenty dollars matching fifty dollars matching 100 matching that is the power of quadratic matching as

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of cool new features that makes using ave even more powerful with ave you can leverage the full power of d5 money legos yield and composability all in one application on ave there are a ton of assets that you can deposit in order to gain yield and all of those same assets can also be borrowed from the protocol if you have deposited collateral here you can see me getting a 200 usdc loan against my portfolio of a number of different defy tokens and eth i'll choose a variable interest rate because

it's a lower rate than the stable interest rate option but i could choose the stable interest rate option if i wanted to lock that interest rate in permanently one of ave's v2 features is the ability to swap collateral without having to withdraw your assets trade them on unit swap and then deposit them back into ave ave does all of this for you all in one seamless transaction so you don't have to repay loans in order to change the collateral you have backing them check out the power of ave at ave dot com that's aave dot com

all right david let's get to releases this is one i am super excited about what i'm showing here on twitter is hop protocol and this is showing a metamask connection and we're moving from one layer to to another sidechain or another layer two from arbitrum the layer to roll up to xdi we're actually moving funds in this transaction that's what you're seeing if you're if you're viewing this on youtube david explain what is going on here with hot critical right so the problem that is being addressed is that liquidity can

be fractured across various l2s and that's bad because we want liquidity to be centralized or centralized into specific exchanges and uh hop protocol i don't know if this is true but i'm assuming what they are doing is some sort of payment channel mechanism where they're they have liquidity providers on both sides or they have or they are actually sending it routing it through the l1 i don't think that's true i think what must be going on is a a payment channel and they are just connecting uh assets across various l2 so if somebody has but

die on both sides of um of x die and arbitrary and then somebody wants to trade eth and they want to get eth on one side on the other market makers on both sides of the of the l2s are allowing people to just swap assets so so they're not sending their assets they are just swapping assets and the assets can be either the same or different on both sides um that is a really important tool to make sure that liquidity across l2s and overall l2 usability stays really really accessible so

getting onto an l2 can take a lot of gas but with something like cop protocol you can stay on various l2s and experience all l2s without actually having to go back to ethereum because if you end up going back to ethereum you're gonna have to pay another gas fee and that's a hundred dollars every time you want to go on to an l2 or or so which you know while it's still an improvement on 100 l1 transfers uh it's still too much for people that want to be able to use ethereum so this is helping them with that yeah very cool stuff and of course we

want to be precise in our language and sometimes uh we're not always precise but it's important for listeners to know that the difference between a side chain and an l2 the difference is this a side chain 2 ethereum is not secured by the ethereum protocol or ethiosa a layer 2 and l2 as david was saying absolutely is and so this is a transfer from arbitrum which is a rollup which would be l2 which would be secured by the ethereum chain to a side chain um xdi which has

its own validator set and it's not secured by the ethereum chain we'll repeat that every once in a while so you guys get the flavor of that but david this also reminds me of your conversation with connex uh there is a whole meet the nation video on youtube about that where you talk to connex can you give us the tl dr of that conversation because um it seems very related to this topic of chain to chain interoperability without having to go back to the main chain yeah connext has been with ethereum

since 2017 working on payment channels because we understand payment channels to be an extremely useful piece of technology but connects has really kind of struggled to see where payment channels fits into ethereum except for lately with this exact same problem and so wow the conversation i i i think was really cool because it was one part a lesson in ethereum history it was one part a lesson in cryptography it was one part a lesson in liquidity and one part a lesson in l2s and so there

was a bunch of information all wrapped into one and basically where connects has landed is the system for matching orders across l2s across any l2 that is evm compatible and even stuff that isn't evm compatible including bitcoin's lightning network so if bitcoin's lightning network does ever actually achieve adoption we could match bitcoin's lightning network with a payment on an l2 via connext which is pretty crazy and so there's a bunch of cross protocol interoperability and communication that is viable due to

these payment channel levels uh in uh like that acts as like this mesh network middleware layer between all of these various l2s it's super cool to hear state channels actually having almost a rebirth moment just as we need them and we need this this chain to chain interoperability and state channels may be a solution for that super cool listeners should double check us if uh state channels are actually part of hop protocol i'm not 100 sure on that so take note that is true okay um this is another interesting i think update from

maker dow this time and this is they are announcing optimism so this is of optimism roll up die bridge with fast withdrawals this is a theme that i think we'll we'll hear it's really like layer two season uh i think we'll see a ton of d5 protocols over the coming weeks and months start announcing what their layer two initiatives are what their layer two solutions are where they're going to deploy next we we heard that last roll up this is this is it again this is maker dow though a pretty long-standing d5 protocol making an announcement of

how they're going to handle this what's the tl dr for us yeah the tdl dr for me is that we are solving problems before they actually even arise right and so we are allowing tokens starting with dye um on and off of l2s uh with immediate or relatively fast withdrawals near instant is what they say um and this is this is a similar problem to what we were just talking about but it's fixing the problem of getting on and off l2s from the l1 which at least with optimistic roll-ups getting off getting on is instant and does cost money and getting

off can take up to a week or even longer depending on the the construction of the optimistic roll-up uh and so fixing that problem is already being addressed even before optimistic roll-ups have actually been deployed to ethereum uh and so maybe it's a cart before the horse but what really my takeaway is that we are having compounding progress in the ethereum ecosystem yeah super cool definitely this is another d5 protocol this one's called super fluid and they are announcing that they've deployed not on ethereum mainnet

but interestingly they've deployed on right on side chains basically or layered to you uh with the deployment to polygon and xdi and david when i looked at what super fluid is doing i thought it was super cool because this is an idea that a protocol called sablier had which was like streaming payments so almost a new d5 money protocol unlock where if i want to send you a hundred dollars i could stream that to you over a 24 period of time or let's say i want to pay you as a

contractor david and i owe you you know two thousand dollars a month i could stream that to you over the 30-day monthly period of time it's like the idea of streaming money is super cool it just wasn't actually practical on ethereum mainnet because of gas fees and because you know ethereum is not not really great for this these peer-to-peer transactions that are small amounts but it works super well on something like polygons something like xdi and that's what super where superfluid is deploying

it handles subscriptions salaries rewards any composable stream of value with continuous settlement and per second netting for what for extreme capital efficiency this is a a cool new unlock david i'm super excited to check this out and actually try it out yeah listeners should understand that this starts with money but it ends with everything and that's why they have composable stream of value so think about uh equity um distributions or vesting periods where like you get unlocked in tranches and

it's just rigid and we can smooth that out vitalik i know likes to talk about um streaming payments for compensation for p for people that allow people to use their wi-fi and so you could pay someone a penny for every megabyte you download using their wi-fi meaning you can go anywhere in the world and and somebody might be able to let you use their wi-fi if you just pay them with streaming payments the the use cases for this are infinite infinite any any type of asset any valuable asset any sort of logic about about time i think time is