ROLLUP: The SBF & FTX Aftermath | ETH Goes Ultra Sound | NEW Ethereum Roadmap | OpenSea Royalties

some good news too we'll get in the macro markets of course inflation a little bit lower than expected this month maybe a bit of a silver lining hey it's only it's only 7.9 percent bengalization happy second Friday happy November maybe I should have said unhappy David uh I see you've got the the wojak mean yeah bring your face yeah pretty sad today yeah that's not a it's not a good week it's been a rough week in crypto

um probably the worst I've seen in terms of sentiment in terms of feeling walking into this roll up I mean how many live streams have we been doing over the last few days uh one one per day since Tuesday so this will be number three yeah well this is in a live stream but still same thing same you and I were up late last night with uh Kobe like oh yeah so forth yeah this is number four session yep I mean but there's just so much to cover so much to talk about and

the way this event has unfolded um for those of you not not familiar of course uh we're talking about FTX SPF how SBF sandbagment read this for everyone I mean he really screwed us over and um we're gonna talk about how we feel about that uh what's what's been happening since I guess yesterday give you the summary of what's happened this week and talk about picking up the pieces I guess grab your morning coffee or maybe something a little stronger yeah if you need it today put some

Baileys in that coffee are you a Bailey supposed cop no you hey you told me if you put anything in your coffee it becomes a beverage yo you take it so people need a beverage this this week this Friday David makes exception for Bailey's um we're gonna talk about that um that's gonna be a big big subject I think get you guys up to speed and uh even A lot's happened since the last time we live streamed got off the live stream at like 1am last night um also we are one year anniversary from

all-time highs isn't that ironic are we supposed to be happy about that too how far are we down for all-time highs 76 crypto market cap is down 76 from 365 days ago so congrats uh it is worth noting that it was it's about one year of time from the 2017 top to the 2018 bottom that was also about one year uh and then we had a two-year bear Market where we touched that same bottom two more times uh and then it was defy

somewhere some good news too we'll get in the macro markets of course inflation a little bit lower than expected this month maybe a bit of a silver lining hey it's only it's only seven point nine percent it's only 7.9 all right happy Happy Days okay uh guys of course if you enjoy the roll ups if you enjoy the work that Dave and I put into the podcast everyone behind the scenes making this happen uh make sure you like And subscribe rate and review that's how we get the top of the charts that's how you get me the dopamine hits to keep on doing this

because weeks like this it's kind of hard it's rough it was a rough week I mean just we'll get into more of that later but uh but first some good news from our friends and sponsors at earnify if you're feeling down why don't you plug in your wallet your crypto wallet your ethereum address the space where you can maybe find some unclaimed airdrops I had a friend um last week text me and be like oh I listened to that earnify I plugged some of my dresses in and I walked away with three okay oh he got some dopamine good yeah

good it's a little dopamine not just dopamine David I mean this is Cold Hard Cash yeah at the end of this what does ernify do yeah earn if I uh takes your ethereum address and then it scans the whole library of airdrops poapps nft mints that you may or may have not gotten uh and so it's just like the it's a little robot to make sure that it it goes and checks all of your pants pockets for the 20 bill that you left in your past Pockets but air drops tend to be worth a lot more than twenty dollars uh so all you have to do uh it's free to

use but you can sign up to get some some extra perks and privileges uh it's free to use you can just put in your ethereum address and it'll go scan the blockchain to make sure that you haven't left any money in any corner of ethereum or any other blockchain for that matter good to go find your money right now on a week week like this uh go to bankless.cc slash earnify that's e-a-r-n-i-f-i to find out more about that all right David let's get into the markets deep breath you ready okay Bitcoin what's it looking like Bitcoin started the week at 20 275 down

14 and a half percent congrats Bitcoin for setting a new low for the year a new low in this bear Market uh We've ticked the bottom at fifteen thousand five hundred and thirteen dollars uh we are currently at seventeen thousand three hundred dollars uh so hit a low of fifteen thousand five hundred the new low for the year uh but back up to 17 300. David I'm gonna be honest I wasn't sure we'd ever see 15K Bitcoin but now um now now 10K Bitcoin and under is in

sight right I mean we're like 50 off of that and what's crazy is this is uh 365 days of of down right for the day yeah well tomorrow tomorrow will be 366. uh but yeah we were at the one year anniversary of the Bitcoin all-time high uh where this high was 69 000 nice uh forty four dollars for Bitcoin uh down about 74 percent from the all-time high pretty brutal I mean I've seen worse though I mean uh last cycle what did Bitcoin

get down to 83 yeah 85 something like this of course uh ether got to 94 all-time high speaking of ether what's that looking like on the week started the week at 15 15 50 uh down 17.8 percent to where it is currently at 12.70. uh it got up to as high as like 13 30 earlier but down to 1270 right now so down 18 on the week and uh what's this chart showing us here uh yes the ratio we are down 0.076 where we were last week to .073 uh again for

what it is you know if it was last cycle ether would be wrecked during a week like this and it's holding up okay so holding up okay ratio's holding up okay but down down bad so 14 for um Bitcoin and then uh 18 yeah 18 for ether I'm pretty crazy how about the crypto market cap as a whole a new low of 830 billion dollar total market cap we are bounced back a little bit to 910 billion dollars that lower than expected uh CPI print uh has saved us a little

bit um created a little bit a little bottom um yeah uh a bottom uh how about crypto punks you wanted to put some nft news in here and there was a flipping that happened it wasn't the Bitcoin flipping but it was a nft flipping yeah I am a biased Punk holder so take that with a gram of salt but punks are now once again and above Apes so the EOG nft now has a higher floor price than the Apes uh one ape a floor ape will cost you about 60 eth a floor Punk will cost you about 66 eth just a stronger holder

Community is that what's happening basically it's kind of the you know the tour sleeve the settler stay yeah people with less conviction on other assets I mean punks are an older uh project as well they are the the oldest nft project they are the OG they are the Bitcoin of MSDS yeah so that is like the nft of Last Resort I guess for this uh for this entire market so uh yeah that's interesting to see uh well let's talk a little bit about the economy well we're talking about then we'll get to crypto but um inflation has officially dropped

to 7.7 percent dropped to 7.7 yes and we're happy about that and the reason why we're happy is because last month it was 8.2 percent and it came in a little bit lower than expectations I think 0.2 percent below expectation so you can see the chart here this is like all the way from 1965 to 2023 and so you could say maybe we've peaked it's kind of looking like maybe we peaked sometime this

summer from an inflation perspective and we're on our way down and I guess that would make sense because we're gonna get to more things later but there's layoffs it's um like the economy is turning interest rates of course have been hiked right up how could inflation continue to rise if we are spinning towards recession it really it really can't unless we get some some situation like stagflation should be even worse so this is an expected drop maybe maybe the good news is uh the FED starts to relent on

their policy the good news at least for markets and what are we looking at here David yeah this is the Spy so spy jumped four and a half percent on this news uh so the index the sby index goes from 307 D4 to 390 up four and a half percent because of the drop in inflation so markets happy Market's happy I'm kind of worried about the Whiplash of CPI like what happens if CPI just like plummets to zero uh while we're laying off people uh that would be called a deflation uh which I mean we like it in ether but we

don't like it in a dollar uh that's what I'm worried about but still uh inflation coming down is good we've got a long ways to go I mean I think the FED is hopeful it can get to like the three to four percent range uh if that's even possible but uh markets like that risk on assets up on that news and so is crypto although it had a much worse week after after being down bigly we had the positive CPI print uh well the lower CPI print which was positive news and then the markets including the crypto markets did like that but I mean

FTX collapse yeah yeah well it's not helping us much this week uh let's just touch on the elections yeah let's not talk about crypto as much as possible this has turned into a political podcast election results for 2022 uh Senate so the um it's still undecided I get this is the U.S election of course uh still undecided election results um majority is unknown apparently each

party needs to win two of three more races that are still in dispute Georgia Arizona Nevada and Georgia the runoff will actually happen in December so we won't know who controls the Senate until then uh also in the House Republicans gained six seats Democrats lost seven um that was expected but actually it's I think it's kind of expected the Republicans would there'd be some kind of a wave yeah which has not Material realize which is just the news that I've

heard yes has not has not materialized but um yeah yeah it's kind of still the way it was before almost I mean no real changes we'll see who controls the Senate uh but no change is considered an L for the Republicans they wanted they wanted the Red Wave they didn't get it uh so the same is a loss for the Republicans if that's what I've heard what's interesting about this is uh crypto had a role to play a minor role of course but if you add up the numbers about according to Wall Street Journal

73 million dollars went into the 2022 elections from crypto I think SBF was like 70 million of that oh six so it was a lot he was a lot which right so we'll get we'll get to a little bit later what does this mean for crypto is the question election results and the answer I think David is what probably nothing probably probably nothing yeah I mean I don't think this impacts it I think the SPF events of this week and FTX meltdown of this week

impact crypto in a big way uh which we'll talk about um David it's also layoff season what headline are we looking at yeah so Silicon Valley kind of down bad meta the face uh parent company of Facebook laying off more than 11 000 employees but they are not the only one uh Silicon Valley overall has light uh got a collective layoffs of tens of thousands so Twitter laid off 3 700 people I don't know if that was like economics related or Elon Musk related definitely Elon

Musk definitely must related and that's 50 of the work Workforce right yeah oh wow I mean a combo but lots of musk in that stripe laid off a thousand people of Robin Hood laid off to a thousand people Lyft laid off 700 people open door 550 Netflix 450 uh it goes on uh yeah so collectively like tens of thousands of people laid off across the Tech sector in just the Bay Area just just San Francisco that's that's uh crazy I mean Tech just really expanded uh during covid over the past two years and now they're they're completely

Contracting um it's starting to happen a little bit too David yeah Dapper Labs cutting 22 of Staff um because nft markets not not great not great yeah when's the last time you heard about NBA Top Shot oh I have not uh the the headline here says sales volumes for Dapper Labs MBA Top Shot has declined to 2.6 million dollars from 20 or from 224 million dollars in February of 2021. uh that is a 99 reduction in

Revenue wow that's that's bad uh yeah that's very bad I mean that 22 might uh might ratchet up throughout all of this um you know one thing the last time I think I've heard of NBA top shots in the context of people actually starting their crypto journey through NBA top shots yeah they no longer do it they no longer maybe they have some some old nfts from NBA yeah they got into the harder stuff it brought a lot of people into crypto right brought a lot of people like I talked to ethereum and D5 it's like uh when I talk to them I'm

like oh so what brought you to crypto and You're gonna laugh at this NBA top shots uh that was the thing I guess let's try to look for some bright spots here and um the big bright spot maybe the only this week I mean there are some other things that are positive that have gone on but um is uh is ethereum and the the the burn rate I mean it sucks that this was the week that ethereum finally went ultrasound because that was a milestone we had planned to actually

celebrate I mean the very beginning of the uh what is the Justin Drake episode almost like two years ago now yeah not almost a year and a half ago yeah a year and a half ago uh where he coined the phrase on Bankers podcast ultrasound money um to describe ethereum's monetary policy and uh this is the week it actually went ultrasound at least ultrasound since the merge what are we looking at here David yeah this is of course the ultrasound.money website uh supply chain since the merge negative

5400 ether Ryan we have burned about six thousand each ish ether maybe maybe seven thousand in the last two three days six thousand either burnt in the last three days bringing us a negative 5 400 ether and like the this is the the through line the message here I want to convey is that this is a anti-f anti-fragile mechanism crypto broke this week liquidations happened prices go down FTX is insolvent and all of that

volatility creates The Ether burn and that ether burn overall makes ethereum more secure and so the why this is like uh if the if you're anti-eath Maxi you're like oh these people are just like circle jerking about the burn like they always do maybe I I am here to say that this is while there is chaos at least ether becomes more anti-fragile because its security gets cheaper as we burn ether and so while there's

destruction everywhere at least ethereum is a little bit more anti-fragile and that is because of the burn and we are now since the merge negative point zero three percent on yearly issuance and we continue to decline so this has been the bright the one bright shining star that I have that's making me a little bit happy this week Ryan yeah I mean uh and I think that's a big one in the in the context of crypto right um ethereum performed very well this week I know you're talking in some of the streams you did earlier this week about this the sense that for a lot of people who are

in kind of the the ethereum bankless defy um world and didn't keep their money in kind of the the Sam coins as Kobe calls them you know ftx's of the world but also in Earth that uh solanas and some of these other assets uh and uh in FTX I like I felt someone like unaffected personally by this right of course crypto prices are down but we've already seen lower crypto prices right even even over the summer even recently

um so it was it was sort of weird to feel like another case of uh the defy ethereum Community we're not insulated from this because obviously FDX is and it's out of 15 in prices on the week yeah massive down and this is terrible for everyone yet not as drastically affected as those that were maybe a little closer to the FTX Community for for instance who can't withdraw their money at this point in time and certainly our hearts go out to people who who've gotten wrecked in that way

but it sort of reminds me of of Luna and Tara as well it's just like I wasn't personally affected by that because uh fortunately we were able to stay away from that catastrophe completely there are some things that smelled bad about that right there's like there's this core of crypto that has a ton of activity it's uniswap it's Ave it's maker it's compound it's a few other applications too and being like a power user of those applications while not

having an FTX account never touching Terra Luna like if you have been in OG D5 1.0 ethereum applications you have been in this like tiny little like bubble of protection while it seems the whole rest of the industry has just like blown up around you that's kind of how it's felt like for me lately yeah it totally is like that scene of like somebody leaving an explosion and there's like you know everything behind them is blowing up and there's fire and mortars going off bullets whizzing by if

you're if you're just tinkering with just Ave uniswap uh you know some layer twos you're you're fine I I do think look I I don't want to Discount the the role luck Place into all of that yes because look one of these smart contracts something could happen in ethereum at any point in time what do we always say this is risky it's not for everyone you could lose everything and yet I think some of the bankless principles have held up pretty well through the storm that is 2022. right even just the idea of going bankless the

idea of making sure that you don't have funds on a public exchange that you're taking custody of your own keys right that thing would have saved people from Voyager from Celsius and even from FTX and that's what we're going to get into next because FTX was the bank the crypto bank that people thought was Secure people thought was safe honestly I did I thought it was fine I did if someone asked me here's the test right if someone asked you hey David I'm thinking again in crypto coinbase FTX you think

one's riskier than the other like I know you have a preference but it's FDX okay what would you say I I would say yeah I think I've been asked this question before and I think I've said yeah coinbase FTX they're fine so have I it was definitely not fine uh guys we're gonna be right back with that the story of SBF and FTX the final day the Judgment Day I guess where all of this has come to light we'll be right back but before we do we want to thank the sponsors that made this episode possible the layer 2 era is upon us ethereum's layer 2 ecosystem is growing

every day and we need layer 2 Bridges to be fast and efficient in order to live a layer two life a cross is the fastest cheapest and most secure cross train bridge with a cross you don't have to worry about high fees or long wait times assets are bridged and available for use almost instantaneously across his bridges are powered by uma's optimistic Oracle to securely transfer tokens between layer twos and ethereum across its critical ecosystem infrastructure and across V2 has just launched their new version focuses on higher Capital efficiency layer 2 to layer 2 transfers and a brand new chain with polygon all

while prioritizing high security and low fees you can be a part of a cross's story by droning their Discord and using a cross for all of your layer 2 transferring needs so go to across.tl go to quickly and securely Bridge your assets between ethereum optimism polygon arbitrum or Boba networks nexo is your financial hub for all your crypto needs nexo lets you buy crypto instantly with your credit or debit card or via bank transfer and they also have an awesome Advanced trading platform nexo Pro where you can get the best possible prices and trade with 50 discount on fees and nexo

also lets you earn interest on your crypto in Bitcoin eth or other assets and they also give you an instant crypto line of credit with as low as zero percent APR and they also give you access to a crypto backed MasterCard of course earning you more crypto when you use it so enhance your financial life with nexo who ensures all credit lines are over collateralized with insurance on all custodial assets next though the right place for your crypto so click the link in the show notes to join over 5 million users who are getting the most out of their crypto the downfall of FTX

Sam bankman freed the owner of FTX irresponsible with depositors money that is the store worry brought total wreckage to the crypto industry this week David uh could you just give us a quick recap of what happened I know we have episodes about this already if people want the full story but what's the the 90 second version 90 second version SPF Rose to fame through this trading fund called Alameda research which he is I believe like the 90 owner over

um Alameda research just would trade in crypto do a lot of uh positions like hedge fund like head trading all this stuff made a ton of money he was a great Trader and that's where SBF made a lot of his initial money and that's where Alameda grew a lot of its capital and then he slowly passed off responsibility to others meanwhile he makes FTX exchange uh seemingly Sam Bateman freed is a great Builder great operator uh FTX The Exchange Rose to fame uh when in a

time where no one really thought it was possible to make another exchange FTX just made a great product a good exchange good Services Good Financial tools everyone seemed to be really impressed by Sam and Sam is a figure it grew in prominence for these two massive successes he slowly passed off all of his responsibility to element of Alameda research to somebody else a team of people and totally focus and double down on the FTX Empire which grew in a crazy fashion there was always this loose association

between Alameda research and FTX where Alameda would Market make on the FTX exchange making FTX extremely liquid and a great place to just have liquidity Beyond just the basics and so there were the symbiosis between Alameda research and FTX helped FTX rise in in Fame we saw FTX buy naming rights for the Miami Heat stadium we saw FTX like sign deals with uh like Tom Brady uh and and just

like a huge success story out of 2021 and you know raise billions of dollars in capital then a report out of coindesk from a leaked Financial document about alameda's balance sheet reported that a lot of alameda's balance sheet all basically all their assets were the FTS FTX exchanges token ftt and it had a ton of ftt as collateral backing a bunch of loans and so Alameda had loans that were backed by ftt it was in a precarious position and that alerted CZ and now

binance was an early investor in FTX CZ of course is the co-founder of binance the a different kind of exchange Empire that he's built and arrival much bigger exchange Empire yes yeah and so binance invested in FTX equity and as a result they had 2.1 billion dollars of ftt and CZ says due to recent Revelations that have come to light we have decided to liquidate any remaining ftt on our books this is largely a result of the precarious nature of ftt because it was such strong uh it was a huge position of alameda's books it was basically all

about alameda's assets were basically ftt tokens people are like how did how did Alameda have such I thought they were trading like Bitcoin and ether why are so much of their assets all denominated in ftt that was a big question mark and so CZ was like okay that's that's not good uh we're gonna start selling our ftt because of this precarious nature which starts uh to First plummet the price of ftt scaring Alameda but then also trigger fears that there is some sort of contagion between Alameda and FTX because people always

knew that there was a link between these two firms from SBF and these were Loosely correlated somehow and people were worried that somehow there was going to be a run on the bank on FTX because of the shared asset the shared Balance Books between FTX and Alameda which was hypothesized that turned out Ryan to be true the that there was co-mingling of assets between Alameda and FTX and so moving forward in the story the next morning after CeCe said he's

going to dump all this ftt a FTX appeared to stop press the processing user withdrawals so they ran out of money and that's basically where it was revealed that uh FTX was insolvent how insolvent was FTX we didn't really know at the time we still don't know but we initially hypothesized something like one to five billion dollars of insolvency which is already a big hole uh it's now coming to be somewhere around in the 8 to 10 billion dollars that is missing from the FTX balance

sheet which is largely coming out of user deposits um so what we're talking about is we've got a somebody who operated an exchange and a hedge fund and right in order to bolster the books of the hedge fund he used deposits money in The Exchange to basically to basically do that he gambled away depositors money in The Exchange I mean that would be a super simple explanation of what happened and so so now there's also it's important to know that Alameda probably was wrecked

along with everyone else during the three arrows Capital contagion back in May yes the reason why they weren't is because they had this relationship with FTX and so they were able to have to not be wrecked because they FTX sent them a bailout a secret under the table bailout and it was it was a bailout of deposit with like backed by depositors funds whatever money that they had including depositors funds absolutely insane I mean before he said in our podcast is like you go to a bank you go to exchange

right you deposit your funds it's not theirs to go like play with and gamble with and use in their side hedge fund it's it's supposed to stay there so that when it's supposed to when the user comes back and says okay now I'd like to withdraw my funds those funds can just be withdrawn and so the balance sheet should be very simple to deposits and withdrawals deposits and withdrawals all user user funds are deposited and then

withdrawn and that completely broke and so I guess you know one of my takes about all of this is because we're still seeing what the Fallout might be in crypto and um it's absolutely massive I think this is the big biggest single event that's occurred in crypto maybe since mount gox in some ways it's sort of exceeded this because uh this is somebody who is supposed to be trusted trust in Wall Street sort of somebody he was in lobbying in DC he represented us

he had the ears of senators and and uh folks in Congress he represented us as kind of like the the cleaned up version of crypto without all of the the crypto Andy Wars and shenanigans uh yes I mean he kind of didn't for the different Mystique but yes he would wear a tie in fact we've seen him in front of Congress uh kind of like talking about crypto anyway all of this just really sunk in with me last night um and uh this is yesterday evening and I was just thinking David like how

surreal the last 48 hours had been as this story has has developed because like I just I don't know how to overstate how big a figure Sam was like crypto trading God exchange God like rock of um I don't know um how to how to last and how to persist and how to do things right in crypto it just his exchange he built was just a phenomenal product yeah except which is sad because that product's gone now and

what's crazy to me is uh as of yesterday it was 11 days ago that we hosted this debate between between SBF and Eric sandbag benfried and Eric Voorhees and uh you remember that this is a screenshot from from that debate and Sam was lecturing us and talking to us about the merits of crypto regulation we were having this debate about crypto values and in the background David this guy had maybe an 8 to 10 billion dollar

hole that was developing on his balance sheet he was talking about crypto values and discussing the merits and and costs of like defy talking about ways to regulate D5 front ends meanwhile he's like playing with depositor money he's gambling it away he's been it's got to be the most irresponsible figure that's done the most damage to crypto that I've ever seen that that this industry has ever seen and this was 11

days ago we were having a conversation with this guy I don't understand like it's even hard for me to believe that um we had this conversation like you were there right like this happened he was so frazzled he was more frazzled and inarticulate than I had ever seen him before like I've seen him give his talks at Capitol Hill and he's like decently articulate that call he was a different person uh and it's it's just