The Path Forward | Livestream

bankless Nation it is uh November 14th Dave and I have been doing these live streams for you doing another one today just to talk about everything that went on last week without question David last week was the craziest week I've ever seen in crypto which is saying something out of 2022. I'm just like maybe we'll ever see in crypto God I hope so I hope so yeah I hope this this feels like I don't know how there's no bigger thing that that could like be worse right like

coinbase could collapse but I'm betting that it's not going to uh like there's no there's no bigger thing like it had that had to have been the fine the finale of 2022 right the grand finale that was the fireworks that was it so we're done I I it's easier from here I mean you don't know that but it feels like a good bow on what was a terrible year in crypto good bow a terrible a bow of terribleness on an otherwise terrible year in crypto um well we've got some things to unpack

I think so part of this is um this story has uh I think the events have settled down a little bit even though SBF is still like tweeting out like he's a Zodiac Killer I don't know what the hell is going on with that man we could talk about that if we want to but part of me is like I don't give me I don't even want to talk about SPF right now I'm tired of giving him attention yeah yeah like so but but for people who aren't aware he is just tweeting out like letters of the alphabet maybe one by one by one yeah what

h-a-h-a-p-p-e I think is so we're we're really I think yeah yeah p and E came really close after each other we just recorded a podcast and last I was up to see I just can't look away even though I don't want to talk it's like a train I still want to know train wreck what he's typing let me uh let me look up his Twitter account so is he spell he's spelling what what happened so yeah I can't imagine what other what other word yeah what happened with the end why why even bother man psychopath yeah I don't get it is he in

control of his uh of his Twitter and he's just is he doing this for what what's what's motivating this guy at this point I don't know he's still he's still in the Bahamas right no idea and that's been unconfirmed either anyway I mean people we there's some things that we can't confirm I think the purpose of this episode is to talk a bit more about um what the state of the industry is like I think that's the overall confusing Wick what what is the state of things I don't think we're in I feel like we're in this period of

time where like it's Monday we're starting to see like announcements so it happened on the weekends they happen on on the weekdays right and so we saw uh Travis kling's Ikea guy ikigai uh hedge fund VC fund uh he had apparently the whole fund on on FTX uh everything on FDX yeah everything on FTX block five just sent out an announcement saying hey like we got nothing we have to seize operations sick right uh and so fun no longer uh you actually had some funds on FTX Ryan did you know wait I do well through

blockfi because they did right oh I'm super loud oh sorry chat I'm turning myself down um uh and so like I think we're in this weird state where like we're starting to see the the contagion Fallout uh and so like but the story's starting to end and like the industry's starting to have conversations about how to proceed forward I feel like we're in that like in between phase right now where like the story is still here but it's coming to a close uh and now we're now we have to think and like reflect as an industry as like all right what the

hell do we do about this let's talk about it and I want to hear what uh what the bankless community thinks about it too so we got a chat window open we're gonna be looking at that yeah and uh some other comments from the community to uh to get into I want to hear more about how your perspective might have changed too um the just the general mood in the crypto the feedback is in general I think we got to talk about where we go from here so guys uh stick with us this is a live stream David and I are doing we'll just go until we run out of things to talk about uh but before we get there we want to thank the sponsors that made

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hey guys a special live stream we are back where do we go from here is the the topic we've done a number of these live streams just because this is a a pretty crazy time in crypto unlike anything we've experienced it I want to ask you this question as we you know kick things off uh so it's been about a week all right so it's a week in a day since SBF you know tweeted is a famous tweet about ftt and selling that and um I mean it's easy we didn't CZ excuse me and we did it he tweeted over the weekend it was it was like Monday which was uh Sunday

Monday it was uh when uh FTX stopped processing withdrawals we did not know at the time of course that um FTX was 10 billion dollars in the whole insolvent we didn't know that this guy was running some kind of a charade was you know um lending against investor money basically using depositors money to to you know pump his own fund and to plug holes we didn't know all of that you know and my conclusion on on that whole thing is like 10 billion dollars is an insane amount of money do you think all of that went to alamina because as far

as I'm concerned I was listening to Brian Armstrong on the all-in podcast and Brian was like I knew coinbase's Revenue I knew ftx's revenue and it didn't check out like he kept on like buying all the things and so like I'm kind of like dude FTX was just like Sam's slush fund to do what the hell he wanted you see that like 40 million dollar apartment that he had or a penthouse that he had in the Bahamas actually okay I saw pictures of this but I didn't get a time

to like it's like I I want to actually go through the listing and take a look at that but yes I saw that among other things which has been uh I believe put up for sale right yes 40 million dollar apartment in the Bahamas he's just like chilling in the Bahamas wasn't he yeah yeah yeah um do you have that photo oh of the of the apartment yeah I'll go get it yeah uh I think I put it in our Discord um let's take me a second uh but like I don't know man he like I I don't know how big

the hole in Alameda was but I again like I said I don't think it would can be 10 billion dollars big and Sam was just like buying everything like left and right as much as things as many things as possible and so like he just had no like just uh discretionary like nature about the funds and he just used customer deposits to buy whatever the hell he wanted like I I think that's going to be uh uh the conclusion to this whole thing there's something psychological about like there's something deeply ingrained that um would cause somebody to do that

um I know by the way uh it was late last week vitalik tweeted out this kind of thing that you know true vitalik style where he sort of separated SPF the person versus SBF the public brand and the Public Image right and his comment was like SBF the public individual the runner of FTX uh deserves a lot of the the slamming and the dunking and the vitriol and the anger coming at him

right because this is a 10 billion dollar hole that probably set our industry back years yeah and yet he balanced that with SPF the person is still a human being worthy of value and respect as all human beings are and he was hopeful that SBF had some family and friends that were supportive of him um it's kind of how I feel and this is I don't I'm not one of sbf's friends I'm not his family members I can't speak to the person but the public individual sambagman freed that screwed our

industry over and pulled one over on us like I I guess I have entered the phase and it goes in and out for me where sometimes like do you know how you're supposed to go through the stages of Grace grief sequentially right and there's like anger but for me I've been going in and out of sometimes I'm sad and sometimes I'm angry and I go to sad and I'm angry and it goes back and forth right now as we're streaming this at this moment moment I'm pretty pissed I'm angry like why like look at this man this is the uh this Singapore house

wait Singapore uh Bahamas Bahamas okay Bahamas excuse me this and that see this is the thing like like he had the this whole like you know New Balances and and all effective altruism and like plain old t-shirts and then he owned this thing I don't even see Sam as the person like giving a [ __ ] about stuff like this I think that's because that's his con man that like he conned us into believing these things no I

don't think he like I'm saying like I don't think Sam cares about a super fancy apartment I think he is just like playing life like a video game and trying to score as many points as possible so if he buys Twitter he buys his apartment like can you see Sam sitting down on that couch and like watching that TV like no he just cares about owning a 50 billion or 50 million dollar like apartment just because he wants to check that box like it's a little sociopathic yeah he's just kind of leveling up treating the

world like a video game yes and some kind of like you know private MBR instance and everyone else is an NPC yeah I guess I guess so and I think like he had and so the other thing I learned from the uh the uh all in pod was that um uh tremoth when it was thinking about investing in FTX uh and shamoth like and his people like gave them like a two-page two-pager as like recommendations and one of them was like set up a board of directors AKA like you know have some adults in the room uh and

there you know what the response was from from SBF to Buck off what yes that was the response just like two terminals yeah and he could well that had to be a red flag big French flag yeah right and so like I guess Alameda and FTX like Alameda and like the Caroline girl uh like I don't know it was just like Sam and his friends who like got access to a billion dollar like money printer and they're

like hey what do we do let's buy this 50 million dollar like Penthouse like this is some this is Wolf of Wall Street yeah this is like Wolf of Wall crazy yeah yeah so how have the events of last week changed your perspective on things ah it's like so like there was the moment in the weekly rolled up right that like everyone knows about uh and and like the bank list like Universe when you yeah yeah yeah exactly yeah and like everyone was like why are you getting sad like

this is C5 this is exactly emblematic of like what we're trying to avoid uh and like defy literally fixes this like this is why we're all here like Financial system by code and math and and I think I was just getting frustrated just like it's just like a bunch of like narrative storytelling and I believe it but like we keep on building all these cool defy things and then we like run over to FTX right like there's just like a moment of just like and we we joke that like you make money

in crypto by going through your second cycle uh not your first cycle like your first cycle you take pain and then you have lessons and then use you make money the second time around well if that's true like you make money the second time around because you're dumping on the first people right and so like it I'm just like cornered by this fact that like there's no way for this industry to like move and progress forward in a way that like doesn't harm people because like how do we learn as an industry like not your keys not your crypto well where did we learn that from Mount Cox right like all right well now we're learning

that like cross-chain bridges are bad uh because we'll lose money there and it's like we only seem to like learn the lessons and actually apply principles like by losing billions of dollars and that was just like frustrating that that I um when we were recording that I was like you know trying to give some some thoughts on this but like in the back of my mind I was like oh SPF just broke David like do you know like you're you're one of the most enthusiastic like bullish permeable people I know right in crypto and about

the space not just I it's not like just dollars price in your eyes right it's actually like you're excited about this technology uh and excited about the good it can do for the world and I think I saw like as you were talking like you doubting that not necessarily for the first time but like maybe in a fundamental way I hadn't seen before and it was funny because um actually you know that Molly White episode that we released yesterday where she's like web3 is going just great right

um and we recorded that a month ago and we did the debrief on that I remember you talking the debrief about um you know Molly white uh sees crypto as like like crypto is like a whole bunch of turtles born on the beach right and they're all kind of running for the ocean right between Turtles are born but only a few are actually gonna make it and your comment then was like and Molly is really concerned about the turtles because she's like there's so much pain there's so much stuff like why do we have to let Turtles die right right and

um that's I think what we're seeing right now right and it's like painful like the the turtles are getting it's like it's like D-Day man they're blown up all around us the turtles are dying and they're just little baby cute turtles Right and why do they have to die why does this have to happen why can't it be why can't we just all make it to the ocean to get we're all gonna make it do you remember that thing yeah we're all gonna make it we didn't all make it I was always suspicious of that I just um I was on board with the GM thing but

that we're all gonna make it I was like oh I don't I got I got news I mean it's nice to say but like someone's not gonna make it um okay and also like why does that have to be true and like well this is why we're all mad at Sam is because like Sam killed like like all-time highs in like turtle deaths like he killed the most amount of turtles like after we after we had Celsius and three hours capital and like and like yeah it was like the drones just yeah scraping the turtles foreign

about this because I don't laugh then David's gonna uh get emotional again yeah yeah the chat's gonna make fun of me yeah the chat's not being very nice right now um but we'll see that's never nice yeah well it's been nicer there there's some there's some antagonists in the chat right now so how have the events changed your perspective then like last week I know how you're feeling but like this week it is it a fundamental shift are you like I mean has it shaken your faith in what we're doing here it's made me understand Bitcoin

maximalism a little bit better it's like it's made the the last week like made me feel very extremist or like want to become an extremist well that's interesting yeah and so like I'm serious about what so like I previously would have called myself like a bank apologist right it's like in the in the future crypto world uh that I see there's going to be a broad variety a broad spectrum of quality products and some of those are going to be centralized and some of those are going to be decentralized uh and just because humans are Folly and we have spfs of the world and like Bernie

madoffs and like all these centralized powers that do all the bad things that doesn't stop the existence of good quality centralized products that exist out there the centralized products are allowed to exist like I believe Brian Armstrong is great personal hero I think coinbase is great um but like now I'm like well now I'm just like no I do trust Brian but like at some point it's like there's after you start trusting Brian like where do you draw

the line and if you want to trust Brian like all right you'll trust like uh I also trust Gemini I also trust like nexo but at some point like you're gonna add you're gonna add too many people into that Circle of trust and you're gonna have one bad one and so like at some point like I can see like the polarization of bitcoiners who are like not One Bank like not one ever uh like one is too much one is too much compromise you don't ever compromise on values right and so I can start to resonate with that like a lot more like the shelling fence has kind of moved

back where you're like rather than it's just the the policy should be a hundred percent bankless all the time right and as soon as possible you get your funds off of that exchange I mean like so I had a conversation with um my dad over the weekend he was like what is happening in crypto right I'm like well okay so and then but he's like well I have some and funds on coinbase sure should I take them off acquaintance right and I was like that you probably should yeah I'm not I don't think I don't think coinbase is going under

right as part of this right I um but we don't know do we this is the thing have you been up to date in this like what do you think of proof of reserves we're talking about the how it's changed our perspective on things right um but how has it changed I guess everyone's perspective on this let's let's talk about some of the some of the players so crypto exchanges themselves this hasn't just been a hit to fdx's credibility all crypto exchanges yes everything centralized yeah anything centralized

anything that cuts these private Keys is under tremendous amount of scrutiny and I become like a bit proof of reserves right like or you don't deserve to hold any of our private keys right audits are audits enough proof of reserves proof of liabilities as well as part of that is not I don't even know if that's possible proof of proof of lack of liability I don't even know if that's possible so we're back to Auditors we're back to trusting it but like FDX was audited they were uh

armenio was one of the Auditors is not like yeah before but it's like one of the top I mean they were audited um so it does it does kind of it does kind of galvanize you to in like um militarize you to be like well we should like back to back to bankless full Bank list right um used to be the policy of like bankless overtime plus plus the things that get you there yes plus the things that get you there and you don't have to do it all at once because don't lose your private keys and there's a lot of risk over there but now I'm just like I

am weighing the risk of keeping anything on a centralized uh exchange very high um we're gonna have some funds in this process yeah I've never lost funds I've never lost funds ever well okay in 2017 I got fished for a fake Iota wallet that was my only time really yeah other than that I haven't you click an email uh I was I was spitting up a new wallet and I was like I need a new Iota wallet so I went to an Iota wallet generator but it was just like I just sent my oh yeah Iota to light their wallet yeah trinary code do you remember this a trinary code

that was one of their things yeah it was like we're basing our uh no the dag the dag yeah the dag the dags yeah right all right so but that's the only time yeah so I um had a little bit of funds on um uh Celsius previously remember because like I try these things and then also block fi and I kept just a little bit on there even after they got bailed out I was like oh okay well may as well not well that's never coming back didn't block if I send an email today kind of confirming I'm just my email yeah but if

I sent an email saying hey like we're ceasing operations don't deposit my money yeah yeah have you noticed like the crypto Industries just feels like at each other's throat right now like everyone just feels super toxic oh yeah dude why the hell is that no this made me sad it's like I know you were yeah uh because we've been we've been attacked in the past like yeah we got we got like the we got to stay golden in here who's like uh in our chat saying like oh this this video is brought to you by FTX even though we've never ever had an FTX as a

sponsor and like up up only had FTX as a sponsor but I don't blame them in the slightest because the whole thing is like the industry got duped sponsor we've had yeah I mean could the Winklevoss twins be rugging us now like right I don't think so but I can't say for 100 certainty right yeah right Allen feels guys like bankless loved blackfly also never had block fly as a sponsor uh it's they're just looking for people to tie to the stake and Burn yeah like I guess when like we lose like 10 billion dollars as an industry like people just

get like uh they they don't get they're growing the pie mentality uh and so like we've figured a few communities I've triggered a few communities like the the hex community and the did you ever have block five as a sponsor no we never never play as a sponsor no never learn from the haters you promoted so much too much garbage yo what what garbage did we promote tell us what garbage what garbage we have not one there's not a single bank that sponsor that has lost a dime of bankless listener money don't say that David yet

knock on wood I mean guys we just try our best I mean like what like what are we gonna do we um we're very judicious in terms of the sponsors uh we decide to support um we've recently made a uh a sponsor decision so at the very at the very beginning of bankless uh we would not do anything with centralized custodian companies and I think the very first centralized custodian we started to sponsor work with as a sponsor was

Gemini and why it's because I'm a Gemini user your Gemini user as well have been in the past yep there are a few exchanges probably that I would consider that I like you have to trust something you have to look you have to get your Fiat to crypto yep all right you need an exchange I don't know how else you do that uh there is no other way to do that right so uh uh Gemini would be like was a sponsor I'd probably do something with Kraken I trust them recently to get my Fiat over to crypto I'd probably do something with

a coinbase never done anything with uh FTX right um the very first time we decided to do something with a borrowing and lending um uh centralized company was uh nexo and that was because they had survived everything up to this point right uh we have and then also Juno you know that um also an exchange with that's also a bank that has like crypto Powers Yeah Yeah it's because I have like look I have

um coinbase I literally still have a Wells Fargo account yeah and I have I don't know how many accounts we have for um Bank lists as a um as a company right but like they've kicked us out of Bank of America because we have interactions with crypto and so we're at like small community credit unions like we have to use Banks right in order we can't can't go fully bankless yet like I wish that were the case this is a journey it's going to take a decade or more right for us to get all the way there so we support hybrid Solutions along the way

when we can right that said um I think that you talked about being uh militant yeah um I think that's very important for us to not support centralized institutions moving forward when there's an alternative yeah I'll make I'll make some exceptions to this so for example if it's an exchange if it's doing the Fiat right to uh crypto totally need that totally understand that there's no way around it but if it's

doing like lending and borrowing unless we have some sort of proof of Reserve System without without proof yeah that includes some sort of liability right or some super strong audits right like and then that should be qualified as well maybe that's not even enough like we need some real certainty there uh in order to ever work with a with a partner like that again um the other thing I'm pretty wary of right now David is um staking centralized States taking

custodians yeah yeah I mean can you imagine if FTX was like staking I don't know 10 percent of ether right now like what would that what like what would happen right if that was the case right that's a major attack Vector you give up your private like so decentralized staking providers are really important here now what what are your thoughts on this yeah I think like I don't have too many thoughts on like the staking element but I think like you you have to have a bank a crypto

Bank coinbase Gemini whatever Kraken to go from Fiat into the crypto world and I think like at this point like this is what we're it's ironic that like FTX was in the Bahamas so they would be outside of crypto regulation and so at some point you kind of have to tip your hat to like regulated entities because of this is what regulation does uh and so like me like crypto banks that are inside of the US I feel like is a acceptable line to draw uh

maybe but what what happened to FTX us is that still here yeah apparent I don't know how that I thought that those were separate too yeah did you see the Tweet about like uh spf's dad is like a like a Stanford like tax uh tax person and then and then it had like after I'm gonna I'm gonna butcher this I'm gonna go get the two it was it was pretty funny uh can you uh I'm gonna post it into uh this is part of the uh conspiracy theory stuff about SBF being it's no it's it's less of a conspiracy

theory here can you share your screen on that one yeah it almost feels scripted that element of it dude this whole thing feels extremely scripted oh wow yeah I have seen this what are we looking at uh I don't know if you're sharing the right one you're just sharing your notifications oh actually uh stop share let me share it there this SPF uh what was the Tweet say SBS father was an expert in tax shelters and a professor at Stanford law on entirely unrelated note this is ftx's corporate structure dude that thing looks like a

motherboard man yeah it does uh that's crazy look at all of these entities I can't even like I can't even read it yeah it's insane it's absolutely insane yeah So Okay so we've lost faith in centralized institutions or centralized custodians and by the way I don't think that's Nest I don't think that's a bad thing right um like um it's a bummer that we can't have both yeah bankless playing innocent is hilarious still got sponsors I see yes

sponsors are how we pay for the show yes we have sponsors yes we have sponsors we will I mean the way up uh Bank list makes revenue is through sponsors and then through subscription yep remember fees that's how we make Revenue grow business we have um eight folks on our team and Counting we're trying to build you know uh incredible products we actually have a new product to announce probably that's coming maybe this week or next week we'll get that announcement out I mean

like we're busy like we're trying to grow this Mission and so yes we have a revenue model um but okay so that's centralized exchanges what about Regulators what do you think they do in the wake of this okay so this is what has made me optimistic is that like even JP Morgan just now uh wrote some article saying like hey like all of the bad things that happened in 2022 in crypto was because of centralization and like I actually think that this is a moment where we are

actually able to go to the regulators and be like look at what happened it was a regulation shitty regulation inside the United States that made and the enabled FTX to go offshore and do all the offshore things and it was centralization it was been the same things I I'm optimistic that there is a moment where the crypto industry the decentralized side of the crypto industry and Regulators can come together and do something useful for a change see that's that's some of that Hoffman optimism yes yes I'm optimistic