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It's Friday, September 11th, and it's time for the Bankless Weekly Roll-Up.

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The AMC CEO declares war on Robinhood tokenized stocks, calling them contemptible, outrageous, disgusting, detestable, inexcusable, and vile.

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Wow, did he really use all of those words?

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Vlad Tenne from Robinhood simply replies, What's the concern?

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bonding a war on Twitter.

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We got some other news as well.

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What else are we talking about this week, Ryan?

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Treasury.

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David, while you're gone, there was some war in the treasury markets and Besson has continued to up the stakes on that war.

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Now he has tripled the long-dated bond buybacks to $6 billion, yet yields are still increasing anyway.

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We got to discuss that.

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Also, David, I want to ask you about maybe a potential altcoin season, like a baby altcoin season.

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What?

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We have Zcash.

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We have Venice.

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We have Nier.

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All of these things are up.

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Robinhood chain is going wild.

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Some people are asking whether this is altcoin season and whether it's way ahead of schedule and why.

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One of the reasons why VVV, at least of all the tokens, is up big is because OpenAI was caught red-handed stealing the work of a million-dollar math prize that had gone unsolved for decades.

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It has been solved, and OpenAI is taking credit.

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Did they actually do the work?

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Or was it one of OpenAI's customers doing the work and they merely just crossed the finish line with the work that somebody else did?

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We're going to talk about all this drama and more.

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We also got some frame transactions out of the Ethereum landscape.

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This is account abstraction once again coming online as a discussion.

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And now people are fighting ETH because if Ethereum does anything, some people will choose to fight ETH about it.

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And Hunter Biden, the story of the year.

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launches a meme coin called Laptop.

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It's the exact movie that you would expect to happen.

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You don't need to watch it, so we'll just speedrun it for you.

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I know everyone is waiting on bated breath to talk about the Hunter Biden laptop, but you're going to have to wait to the end.

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We're going to start talking about markets.

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Bitcoin and Ether, the blue chips of the industry, flat on the week.

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Meanwhile, the following tokens all hit all-time highs.

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Leiter, VVV, and Zcash all hit all-time highs this week.

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Near up 30%, Arbitrum up 40%, which brings Ryan asking the question, are we in an altcoin season?

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Is this all coin season?

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Ryan, is this all coin season?

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That was a hypothetical question.

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I know the answer to that already.

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But I want to get your answer to that question.

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Okay, I know the real answer.

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So what do you think?

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I mean, this doesn't usually happen, or at least that's part of the narrative, right?

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Bitcoin's supposed to pump first.

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That's supposed to confirm the early bull.

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I guess we got a little bit of a pump, right?

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When you left two weeks ago, where was Bitcoin?

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It had already jumped to close to 80K, right?

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When you'd left?

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Bitcoin pumped from like $65,000 up to $77,000 three weeks ago.

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Okay, okay.

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And so we have actually, Bitcoin has been ranging between like $76,000 and $82,000, $81,000 for three weeks now.

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Without actually going in any direction.

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We got to $81,000, but we didn't get to the May highs actually.

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Yeah.

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above 82, which is somewhat interesting.

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So we were higher in May.

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But anyway, we got a bit of a bump.

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And now we have all of these non Bitcoin assets pumping.

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So what do you think?

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Is that altcoin?

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Are we in kind of a mini micro altcoin season?

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I'm kind of reminded of a conversation I had forever ago with Mike Abolito, where he was telling me about one of the macro commentators that he likes the most, who pays attention to the Fed, you know, pays attention to macro, but also invests in crypto.

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And it was like a it was like a funny bit where he was saying like, oh, yeah, I think the Fed needs to ease.

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This is like two to three years ago.

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The Fed needs to ease.

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We're going into an easy money era.

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And therefore, I'm buying pudgy penguins.

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And like, I kind of think that's what happened in the crypto industry recently.

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Like we are, like Besant is going to war against the bond market.

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We are doing, you know, quote unquote, quantitative easing in our own new way.

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And therefore...

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crypto industry participants are buying meme coins.

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Yeah.

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And so like the DGens are just going straight to the end and Bitcoin moves slowly.

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Ether moves slowly.

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But some of these tokens that hit all time highs like Leiter, Venice, Zcash, you know, like I said, Near and Arbitrum are up big.

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Meme coins are printing new highs in terms of DEX volume.

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I think that's just like a lot of the crypto DGens seeing this.

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the same pattern of just like, oh, we're going into an easy money era.

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Let's go to the riskiest table in the casino.

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Yeah.

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Because that's just a spinal reflex that we have.

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You know what I call that?

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The DGN debasement trade.

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Because it's like, it's basically the debasement trade, what you just described.

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Except it's like going way down market where you can get the 10X, the 25X, the 100X style returns.

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But I do think it's too early to call altcoin season fast.

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I'm worried about us getting ahead of our ski tips here.

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Yeah, it's like, look, Bitcoin dominance is still almost at 60%.

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So, like, have you seen, look at the start.

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Do you see anything that has shaken up Bitcoin dominance?

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You cannot call a big, you know, altcoin season when Bitcoin dominance is near 60%.

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But...

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And Michael Nadeau actually reminded me of this.

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In 2023, which I don't think any of us would think of as a particularly bullish year for crypto.

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It was like we were sort of rebounding.

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There was like we were just trying to get over 2022 and FTX.

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It turned out to be sort of an early bull, but there were pockets.

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It was a repair year.

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It was a repair year.

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It did not feel particularly bullish, right?

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Not until we got the kind of the BlackRock ETF did things really start to feel bullish in crypto.

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Which was like October 2023, I think.

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Yeah, but do you remember all of these pockets of speculation back in 2023?

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So we had Blur.

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Do you remember that?

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That was February 2023.

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Yeah.

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In March 2023, the ARP token actually launched.

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So we got an L2 kind of revival.

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We had Bitcoin ordinals.

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That was also in March.

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We had WorldCoin launching in 2023 as well.

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That was in July.

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We had, do you remember 2023 summer, Frentech.

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Remember when that came on the scene?

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Oh my Lord.

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Just a pocket of pure speculation.

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And the speculation bubble kind of like moved from thing to thing throughout 2023.

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Toward the year end, we had the Jito airdrop and the Tia airdrop.

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And there were all these speculations.

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The Jito and Tia airdrops were absolutely the starting pistol for the following year.

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They were.

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But it was this moving bubble of speculation.

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because it was just the crypto natives who were here.

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I still think it's that.

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I still think it's crypto natives are here.

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And this is a bubble, you know, a pocket of air of speculation that's moved to kind of Robinhood chain, but too early to call a full altcoin season.

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Do you think as well that there can be an altcoin season without Ether the asset, David?

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Without Ether getting its due, okay?

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This was a... Yeah, I do actually.

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We had that last time.

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We've already seen that.

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Okay, but maybe this time is different.

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This was a post from Michael Nato as well.

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He said, Robinhood buying a ton of ETH seems like an obvious move at this point.

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They'll likely make money on it.

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And he says, as I think more about ETH this cycle, this is probably the bull case nobody's talking about.

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Not the store of value narrative, just institutions deploying and buying and then signaling to the community with ETH purchases.

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So he's saying Robinhood, potentially, they have the success of the Robinhood chain.

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How do you get in good with the crypto natives who are buying all the meme coin assets in the Robinhood chain?

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Will you buy some ETH and you put it on the balance sheet?

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you'll probably make money on that trade alone, particularly when you get behind it.

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And that could be a catalyst for ETH.

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He's also big in this idea of like new wealth creation, you know, and I know you've talked about this in the past, which is like ICO, wealth creation, NFT, wealth creation, meme coin, wealth creation.

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Yeah, yeah.

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Yeah, you have to have some wealth creation episode in order for the full bull to get running.

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Well, the question is, who are the meme coin traders on Robinhood right now?

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And if they are getting wealthy right now, where are they going to deploy that?

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And Mike's thesis is, it's actually coming from

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parts of the eth community who missed out on pump fun and all the solana meme coin shenanigans the unk unk plumbers won the last battle yeah you think of the archetype of someone like eric connor for instance who's sort of like a eth maxi of maxi he didn't do much with respect not as much anymore not anymore he's aligned but he is what's he trading now what's he trading on robin hood now

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Boner coin as well.

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Boner.

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Like, okay?

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Boner.

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Right?

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So he thinks that wealth creation event might actually feed back into Ether the asset.

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Anyway, there's a little, speaking of boners, there's a little bit.

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I don't know if I want to consider this a wealth creation event.

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Right.

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I would like to throw a soft flag at meme coins being a wealth creation event.

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Like ICOs, which in hindsight were terrible.

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I'm not excusing them.

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At least had a semblance of, hey, we are going to create something that is going to be good for the world.

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And meme coins are just, it's a meme coin called boner.

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It doesn't pretend to be anything.

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It's not.

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That's the whole point.

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And so I would like to not perfectly equate meme coins with the pattern of

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generative startups, even though our past history of generative startups have been terrible.

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No, I'm not making any moral claims on these things or any even utility type claims or any good for society claims.

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I'm just saying it's wealth creation.

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And if you look over on Robinhood chain, there is wealth being created.

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There are market caps and coins going up right now.

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And so, you know, are they going to keep all of their wealth in boner coin or are they going to move that into some other asset?

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That's the wealth creation event.

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Ryan, the last thing I said to you before disappearing for Burning Man at the end of the weekly rollup before I logged off was, hey, there's this like meta happening that's kind of like early, but it's like these weird paired tokenized stocks with a meme coin thing.

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And so people are like putting a meme coin in an LP pool with a tokenized stock.

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And that was it.

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And that was the end of the weekly rollup.

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And then I was gone for two weeks.

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The last thing I did before I logged off was I bought $1,000 of boner at a $370,000 market cap.

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And then five days later, I look at my phone connected to Starlink and I'm up $120,000.

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Wow.

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And Eric Conner is up $2 million.

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Congrats on that trade.

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Oh my God, that was wild.

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What enticed you to buy that specific coin at that time?

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Yeah, like how did I pick out boner?

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I was like thinking about this.

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Oh, is that the one that's like, that's paired against the HIMSS stock, right?

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Which is like, what, erectile dysfunction, you know, stock or something like that?

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Yeah, there's like boner advertisements all over New York City, and it's all kind of like ED coded, like soft coded, because it gives like, if you're a male, like buying this product, you get some sort of like,

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deniability by is like it's it's like not actually speaking the words into existence it's like only oh it's like a wink wink nudge nudge kind of thing okay uh anyway health product uh your question was like of all the meme coins that i bought how did i how did i choose to buy boner yeah of all and also what does that say about you that's my question i'll get to that i'll put that on the premium feed

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Boner It makes 6th graders laugh So that's good That's bullish Yeah It kind of was reminiscent Of Fartcoin Of just like It's so simple It's so mimetic Like why did Fartcoin run Like two years ago

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Because fart, it's fart.

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It's like such a mimetic, like you laughed at farts so many times when you were in middle school and high school.

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So same kind of category.

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It's very simple, very mimetic.

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And then it also fit into the category that I was telling you about before I logged off, which was like, it's paired with a tokenized stock

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It's very simple.

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It's very romantic.

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Like, fart coin ran because we hadn't tokenized farts yet.

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Boner ran because we hadn't tokenized boners yet.

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And those things, like, came together.

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And it's like, okay, I think this is, like, valid enough.

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Brilliant logic, David.

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I think you should, you know, go full-time meme coin trading with this type of insight.

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I think you'd do really well in this market.

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Unlike most people who bought Boner, I, I, I, I, I, okay.

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I'm kind of think that this is a local top on the casino, if you will.

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And like, one of the reasons why I think that's true is like, if you look at the PONS token, which is like the new meme coin launch pad, that thing is down, uh, like 50% off of its highs.

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Robinhood REV activity is down off of its highs, uh,

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I was writing an email to the HIMSS CEO inviting him to come on the podcast just because he was in the meta.

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And I was like trying to like think about this from the receiver side because like sometimes stretch guests, you need to like put a lot more effort.

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You know the deal.

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You have to put more effort into like enticing them to come on the podcast.

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And so I'm trying to like put myself into the position of the HIMSS CEO because he followed the Boner Twitter account because again, Boner is paired with HIMSS.

222
00:13:50.040 --> 00:13:55.384
And so would he even be... And HIMSS is going up as a result of Boner, at least, you know, short term?

223
00:13:55.404 --> 00:13:55.524
Is it?

224
00:13:55.544 --> 00:13:56.145
I'm not sure.

225
00:13:56.165 --> 00:13:57.025
I'm not sure.

226
00:13:57.045 --> 00:13:57.606
I don't know.

227
00:13:57.646 --> 00:14:02.749
HIMSS tokenized stock on Robinhood, like, dislocated because there was so much demand for it.

228
00:14:03.050 --> 00:14:15.819
And so the theory is of this tokenized stock meme coin LP thing is that this is going to be really helpful for the equity on the public market because you have a new set of buyers coming in for the speculative meme coin reasons.

229
00:14:16.359 --> 00:14:18.081
And so I go and pull open the data.

230
00:14:18.121 --> 00:14:19.182
I got to go look at the receipts.

231
00:14:19.942 --> 00:14:23.364
And HIMSS is a $6.5 billion company.

232
00:14:24.044 --> 00:14:28.166
It has a 30% outstanding short supply, so it's heavily shorted.

233
00:14:28.906 --> 00:14:37.791
And so the idea is that these tokenized stock meme coin things will help short squeeze the stock because there's enough demand to buy the tokenized version.

234
00:14:38.211 --> 00:14:43.133
And so with the enough buying pressure, we'll do a short squeeze on the hedge funds, same thing as GME.

235
00:14:44.114 --> 00:14:48.936
There is $3.5 million of tokenized HIMSS stock on Robinhood Chain.

236
00:14:49.534 --> 00:14:51.536
on a $6.5 billion stock.

237
00:14:51.636 --> 00:14:52.116
Oh, yeah.

238
00:14:52.216 --> 00:14:53.577
It's not even worth his time.

239
00:14:53.778 --> 00:14:55.079
That is not happening.

240
00:14:55.419 --> 00:14:57.621
There is no short squeeze that is happening.

241
00:14:57.841 --> 00:14:58.041
Yeah.

242
00:14:58.101 --> 00:15:01.564
And so I think that whole narrative is very far-fetched.

243
00:15:01.924 --> 00:15:05.127
We're seeing a, this is just this week, so this could be very short-term.

244
00:15:05.167 --> 00:15:08.670
We may be just doing a break before chips go back on the table.

245
00:15:09.170 --> 00:15:16.095
But I think this is like a kind of a, I think we're kind of toppy on this current iteration of the casino.

246
00:15:16.495 --> 00:15:19.057
And same thing with the kind of the flag that I was throwing earlier.

247
00:15:19.097 --> 00:15:21.239
So like meme coins are not wealth generative activity.

248
00:15:21.279 --> 00:15:22.020
This is not new.

249
00:15:22.620 --> 00:15:23.901
The tokenized stock market,

250
00:15:25.622 --> 00:15:53.896
meme coin LP positions are kind of novel in meme coin land but broadly this is still meme coins this is still the same movie that we've seen this is not going to escape reach escape velocity out of the crypto industry in the same way that NFTs did I kind of think that the meme coin speculative frenzy that we have seen in the last like six weeks is about to be over I don't know if I want to say that so confidently but it kind of feels that way

251
00:15:54.336 --> 00:15:55.698
Anyways, I sold most of my boner.

252
00:15:55.918 --> 00:15:59.501
I was going to say, I was going to say, I hope you've sold your boner then.

253
00:15:59.541 --> 00:16:00.582
I sold most of my boner.

254
00:16:00.622 --> 00:16:02.404
If this is your true opinion.

255
00:16:03.205 --> 00:16:07.749
We'll discuss a bit more about this, including the AMC stock trade.

256
00:16:07.769 --> 00:16:12.774
But on more serious matters, let's talk about the global bond market, shall we?

257
00:16:13.155 --> 00:16:14.496
So I think when you left.

258
00:16:15.197 --> 00:16:16.758
Let's pivot into the bond market.

259
00:16:16.778 --> 00:16:17.919
It's just a hard pivot.

260
00:16:17.939 --> 00:16:18.060
Yeah.

261
00:16:18.480 --> 00:16:19.660
Shall we use that term?

262
00:16:20.241 --> 00:16:21.181
Okay, so the bond war.

263
00:16:21.201 --> 00:16:22.621
This is like week four.

264
00:16:22.781 --> 00:16:29.744
I think as you were leaving, the treasury put, the Besant put, that trade was starting to be put on.

265
00:16:30.064 --> 00:16:31.785
At the time you left, it was $2 billion.

266
00:16:31.805 --> 00:16:35.606
You're going to buy long-dated bonds, $2 billion per week.

267
00:16:35.866 --> 00:16:36.666
Had a way to do that.

268
00:16:37.166 --> 00:16:38.627
That went to $4 billion.

269
00:16:39.127 --> 00:16:41.068
And now, David, it's at $6 billion.

270
00:16:41.648 --> 00:16:43.249
So just this week, we are up 3x.

271
00:16:44.009 --> 00:16:45.329
Here's a tweet.

272
00:16:45.429 --> 00:16:53.732
The U.S. Treasury announced it is buying back $6 billion in long-term debt, tripling levels seen before the recent intervention announcement.

273
00:16:54.173 --> 00:16:59.875
So they keep upping the stakes here in an effort to get Treasury yields down.

274
00:17:00.215 --> 00:17:03.076
This was a fascinating clip from Besant.

275
00:17:03.336 --> 00:17:05.497
He was speaking at a fireside chat.

276
00:17:05.697 --> 00:17:06.357
Let me just play this.

277
00:17:07.165 --> 00:17:14.688
Whenever people say, oh, well, Treasury Secretary is taking a risk, it's my dream.

278
00:17:14.988 --> 00:17:16.549
I have asymmetric information.

279
00:17:17.729 --> 00:17:19.690
I am the house now.

280
00:17:22.051 --> 00:17:24.792
So when we intervene with the Japanese yen,

281
00:17:26.313 --> 00:17:35.040
I have pretty good insight into what the Japanese, what the Bank of Japan is going to do, what Japanese policymakers are going to do.

282
00:17:35.521 --> 00:17:36.221
Do you hear that, David?

283
00:17:36.402 --> 00:17:37.282
I am the house now.

284
00:17:37.382 --> 00:17:37.763
Does this?

285
00:17:38.023 --> 00:17:38.323
I'm not.

286
00:17:38.483 --> 00:17:39.164
I'm not bullish.

287
00:17:40.725 --> 00:17:41.486
That's an Icarus.

288
00:17:41.666 --> 00:17:42.527
He's Icaricing.

289
00:17:42.867 --> 00:17:44.168
You are not the house, sir.

290
00:17:44.328 --> 00:17:46.070
The market is the house.

291
00:17:46.650 --> 00:17:49.753
You are a large player, but you are not larger than the market.

292
00:17:50.761 --> 00:17:51.801
There's something reminiscent.

293
00:17:51.821 --> 00:17:54.742
We've seen our share of Icarus's in crypto over the years.

294
00:17:54.862 --> 00:17:58.103
And he's not Icarus-ing that hard, but he's getting up there.

295
00:17:58.783 --> 00:18:04.304
And yeah, it doesn't make me feel good about where bond yields are going on that.

296
00:18:04.324 --> 00:18:09.846
I think it's very notable that the buybacks tripled and then yields have risen.

297
00:18:09.866 --> 00:18:10.866
Yes, they have.

298
00:18:10.966 --> 00:18:15.627
If you listen to my episode with Jim Bianco, he has a perfect explanation for this,

299
00:18:20.168 --> 00:18:25.993
By hiking rates, because it's giving them confidence that inflation is going to be under control.

300
00:18:26.494 --> 00:18:28.135
Besant is doing the opposite.

301
00:18:28.215 --> 00:18:29.316
He is doing QE.

302
00:18:29.376 --> 00:18:30.457
He is injecting money.

303
00:18:30.517 --> 00:18:34.181
He is injecting liquidity, which is going to induce more inflation.

304
00:18:34.261 --> 00:18:40.727
And so it's causing bond holders to sell because they are not confident that inflation is going to be under control.

305
00:18:40.767 --> 00:18:41.567
And so the more...

306
00:18:42.248 --> 00:18:49.931
QE that Besant buys, or the more bonds that Besant buys, the more bond sellers are coming into the market, is Jim Bianco's rationale.

307
00:18:50.151 --> 00:18:54.072
And if that would predict exactly this effect that happened this week.

308
00:18:54.252 --> 00:18:55.632
Well, I think there's an element to that.

309
00:18:55.672 --> 00:18:58.133
He keeps ratcheting it up, and he's tripled the buys.

310
00:18:58.453 --> 00:19:00.454
And this is the 30-year yield.

311
00:19:00.614 --> 00:19:01.654
It's at 5.3%.

312
00:19:01.874 --> 00:19:04.635
I mean, highest since 2007.

313
00:19:04.715 --> 00:19:06.516
It continues to make all-time highs.

314
00:19:06.956 --> 00:19:07.976
This is the 10-year.

315
00:19:08.156 --> 00:19:09.417
It's also creeping up

316
00:19:10.317 --> 00:19:15.242
All of this has an effect on politics and, of course, midterms.

317
00:19:15.762 --> 00:19:17.644
So this is mortgage rates.

318
00:19:18.105 --> 00:19:25.611
Mortgage rates, after decreasing to close to 6%, they're back up, heading towards 7%.

319
00:19:25.912 --> 00:19:33.999
We also have inflation, as you mentioned, like diesel is at a record almost $6 per gallon right now.

320
00:19:34.379 --> 00:19:34.480
But

321
00:19:35.180 --> 00:19:40.403
Basically, the 30-year and the 10-year and the bond market sets the cost of capital.

322
00:19:40.843 --> 00:19:52.270
So you can imagine any kind of loan product, whether it's a car loan, whether it's a credit card, whether it's a mortgage, those numbers are going up with the bond market continuing to go up.

323
00:19:52.750 --> 00:19:57.831
And I don't know if you saw this, David, but this happened, I guess, the day before we've recorded.

324
00:19:57.971 --> 00:20:07.214
This is Donald Trump injecting his input into this, not specifically about bonds, but the politics of affordability.

325
00:20:07.554 --> 00:20:08.234
Here's what he said.

326
00:20:09.394 --> 00:20:16.756
But what we're doing is because we've done so well and because our country is making so much money.

327
00:20:17.737 --> 00:20:20.859
that only I can make this promise to you.

328
00:20:21.559 --> 00:20:22.720
And here is my promise.

329
00:20:23.561 --> 00:20:43.733
If the Republicans win the House of Representatives and the United States Senate, both of them, because of our economic, tremendous economic success, like in history we've never had anything like what's happening, but because of our tremendous strength and success economically,

330
00:20:44.796 --> 00:20:51.192
I will issue a dividend to every adult citizen in the United States of America for $5,000.

331
00:20:56.361 --> 00:20:57.641
There you go, David.

332
00:20:58.081 --> 00:21:02.463
A $5,000 dividend to every adult in the United States of America.

333
00:21:02.743 --> 00:21:05.223
The cost of this would be about a trillion dollars.

334
00:21:05.703 --> 00:21:08.264
Of course, tariffs would pay for all of this.

335
00:21:08.644 --> 00:21:15.486
Tariffs, meanwhile, I think they raised about $150 billion and have been spent already 10 times that amount.

336
00:21:15.906 --> 00:21:17.806
And this is an additional $1 trillion.

337
00:21:18.226 --> 00:21:23.988
So Trump with just a direct appeal to populism on the backdrop of...

338
00:21:24.508 --> 00:21:32.132
basically a top three issue, maybe the top issue for voters, which is like cost of living, affordability.

339
00:21:32.352 --> 00:21:38.215
There's a Reuters poll I saw today, 74% say cost of living is on the wrong track.

340
00:21:38.815 --> 00:21:49.100
It's a top issue for both parties and the cost of capital rising, the bond market rising, does nothing to improve that, makes it far worse.

341
00:21:49.861 --> 00:21:52.122
So what's gonna happen there?

342
00:21:52.982 --> 00:21:55.243
Did the markets react after he said this?

343
00:21:55.263 --> 00:21:56.563
I don't.

344
00:21:56.583 --> 00:21:57.884
Because Donald Trump says a lot of things.

345
00:21:57.924 --> 00:22:04.786
Well, I mean, look, he said if Republicans win the Senate and the House, it's kind of a, that's probably not going to happen, right?

346
00:22:04.886 --> 00:22:06.486
Like, the Senate and the House?

347
00:22:07.047 --> 00:22:09.547
Not before people are incented with $5,000.

348
00:22:09.567 --> 00:22:13.769
Yeah, you think that's really going to move people into kind of, you know, like.

349
00:22:13.789 --> 00:22:14.109
No, no.

350
00:22:14.529 --> 00:22:19.471
Do you think you can actually get voters to just be bribed for $5,000 in order to vote?

351
00:22:19.931 --> 00:22:22.592
Especially when it's a promise coming from Donald Trump.

352
00:22:22.692 --> 00:22:26.273
You don't know whether you can cash that check, whether that would actually happen or not.

353
00:22:26.313 --> 00:22:26.513
Right.

354
00:22:26.753 --> 00:22:27.954
Or whether it's just rhetoric.

355
00:22:28.434 --> 00:22:28.654
Yeah.

356
00:22:29.274 --> 00:22:36.176
This does trigger my memory of when we all got $1,200 helicopter money from the Biden administration during COVID.

357
00:22:36.236 --> 00:22:40.638
And then Brian Armstrong tweeted out the most incredible chart ever, which was,

358
00:22:41.418 --> 00:22:46.221
a chart of dollar deposits into Coinbase by count.

359
00:22:46.841 --> 00:22:50.063
And there was like, you know, you would see a lot of $1,000 deposits.

360
00:22:50.083 --> 00:22:51.724
You would see a lot of $5,000 deposits.

361
00:22:52.044 --> 00:22:55.106
But like the week of the $1,200 helicopter money.

362
00:22:55.126 --> 00:22:56.267
It was like $1,200 checks.

363
00:22:56.327 --> 00:23:02.210
The number of $1,200 deposits into Coinbase was just like, it blew up the chart.

364
00:23:02.950 --> 00:23:05.412
And I think people, the government...

365
00:23:06.452 --> 00:23:13.339
Everyone should take note that when the government hands you money, people take it to buy Bitcoin or hard assets generally.

366
00:23:14.200 --> 00:23:18.864
Or the degen debasement assets like meme coins and whatever shenanigans.

367
00:23:18.884 --> 00:23:30.275
Yeah, but like they're not keeping it in your system because obviously if you disrespect your financial system, people are going to take the money that you are just disrespecting it with and take it elsewhere and remove it from the system.

368
00:23:31.016 --> 00:23:31.856
Here's the thing, though.

369
00:23:31.996 --> 00:23:39.398
I know we've been, this whole rally has been kicked off by the debasement trade and sort of the Besant put, you know, four weeks ago, this crypto rally.

370
00:23:40.139 --> 00:23:46.020
I don't think that this, the reason for the yields going up is just debasement and just inflation, right?

371
00:23:46.140 --> 00:23:47.441
It's AI.

372
00:23:47.901 --> 00:23:49.101
And Hasib made this point.

373
00:23:49.141 --> 00:23:50.002
the last couple of weeks.

374
00:23:50.022 --> 00:24:01.472
It's just the cost of capital is going up because AI is so profitable and they can make profit on a token and they need capital, they need debt instruments.

375
00:24:01.612 --> 00:24:02.793
An AI token.

376
00:24:02.833 --> 00:24:03.534
Yeah, I should say.

377
00:24:03.594 --> 00:24:04.655
An AI token.

378
00:24:04.955 --> 00:24:07.958
They can generate tons of cash on that.

379
00:24:08.419 --> 00:24:11.402
And they need a lot of investment in order to continue that build out.

380
00:24:11.722 --> 00:24:15.105
And they will pay top dollar yields to investors.

381
00:24:15.526 --> 00:24:18.068
And so the nominal GDP is going up.

382
00:24:18.309 --> 00:24:19.330
And in that backdrop...

383
00:24:20.397 --> 00:24:22.579
yields will go up and they will continue to go up.

384
00:24:22.659 --> 00:24:28.304
Another era to look at actually is the 1980s where the market was just kind of like humming.

385
00:24:28.964 --> 00:24:33.788
And I read a Michael Howell post earlier this week who compared right now to actually 1987.

386
00:24:33.928 --> 00:24:35.710
He says, kind of like that.

387
00:24:36.490 --> 00:24:43.111
The yields were very high, but we also had GDP and an economy that was like raging and hot.

388
00:24:43.491 --> 00:24:48.212
And so sometimes high yields are not just examples of like a debasement trade.

389
00:24:48.612 --> 00:24:55.414
It can be that the economy is kind of booming and nominal returns and nominal GDP is increasing upwards.

390
00:24:55.454 --> 00:25:01.975
So a lot of that is happening, which is why like, I don't know if it makes sense for Besant to fight this secular trend.

391
00:25:03.491 --> 00:25:05.713
Look, Besson has way more experience than me.

392
00:25:05.794 --> 00:25:06.174
That's right.

393
00:25:06.194 --> 00:25:07.335
He has way more information than me.

394
00:25:07.375 --> 00:25:08.096
Yes, he's the house now.

395
00:25:08.116 --> 00:25:09.778
But like, he's the house.

396
00:25:10.018 --> 00:25:19.829
But man, I don't like, it just doesn't make me comfortable to see the government react to the market and try to win a thumb war over the market.

397
00:25:19.889 --> 00:25:21.791
Like you don't, the market always wins.

398
00:25:21.931 --> 00:25:23.152
The market is the house.

399
00:25:23.212 --> 00:25:24.353
You are not the house, sir.

400
00:25:25.094 --> 00:25:26.495
It feels a little panicky.

401
00:25:26.595 --> 00:25:30.498
We got to talk more about Robinhood, including the AMC CEO.

402
00:25:30.658 --> 00:25:31.438
You said it was this.

403
00:25:31.498 --> 00:25:35.401
He used these words, contemptible, outrageous, disgusting, and detestable.

404
00:25:35.981 --> 00:25:37.122
What is he talking about?

405
00:25:37.162 --> 00:25:38.343
We'll discuss all that and more.

406
00:25:38.383 --> 00:25:41.545
But before we do, let's thank the sponsors that made this episode possible.

407
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408
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409
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410
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411
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412
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413
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414
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415
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416
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417
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418
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419
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420
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421
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422
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423
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424
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425
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426
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427
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428
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433
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434
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Cheers.

435
00:27:31.765 --> 00:27:34.566
Ryan, you should never, ever annualize a weekly chart.

436
00:27:34.766 --> 00:27:43.251
But if you did, the Robinhood chain is printing Robinhood $1.5 billion of annualized revenue.

437
00:27:43.491 --> 00:27:43.931
Insane.

438
00:27:43.951 --> 00:27:44.852
Just from the chain.

439
00:27:45.592 --> 00:27:46.952
Don't annualize the weekly chart.

440
00:27:47.453 --> 00:27:52.274
But the metrics coming out of Robinhood Chain is pretty damn crazy.

441
00:27:52.334 --> 00:27:55.455
Robinhood Chain is now the number one blockchain by revenue.

442
00:27:56.556 --> 00:27:59.657
Generated $30 million this last week.

443
00:28:00.477 --> 00:28:01.737
This last week.

444
00:28:01.917 --> 00:28:05.119
Most of this is from meme coin trading.

445
00:28:05.619 --> 00:28:12.281
But also because these meme coins are paired with tokenized stocks, that means that it's also tokenized stock volume as well.

446
00:28:12.841 --> 00:28:20.208
So that's one of the big unlocks here is that because Robinhood has invested in the whole tokenized stock ecosystem, they are capturing this activity.

447
00:28:20.969 --> 00:28:33.160
And really, like, it's also interesting to say, interesting to learn that I think like 70 or 80% of the volume on Robinhood chain on at least on the meme coin activity is coming from the FOMO app.

448
00:28:33.740 --> 00:28:37.885
And so FOMO is acting as a huge conduit of activity.

449
00:28:38.646 --> 00:28:48.739
And the FOMO plus Robinhood chain combination is generating the most speculative fervor of activity since the whole meme coin mania on Solana in like 2023.

450
00:28:49.399 --> 00:28:51.602
And so once again, the meta is meme coins.

451
00:28:52.383 --> 00:28:53.424
It was MemeCoins last time.

452
00:28:54.525 --> 00:28:55.846
It was MemeCoins the time before that.

453
00:28:56.247 --> 00:28:59.850
And now with Robinhood Chain and a brand new social trading app, it's MemeCoins once again.

454
00:29:00.811 --> 00:29:06.616
But it is pretty cool nonetheless to see a big chain launch and generate a lot of excitement and activity in crypto.

455
00:29:06.896 --> 00:29:07.376
I saw this.

456
00:29:07.437 --> 00:29:13.642
Even Pump.Fun is trying to catch up on that pair meta with a stock and a MemeCoin.

457
00:29:13.662 --> 00:29:15.324
So they just launched custom pairs.

458
00:29:15.904 --> 00:29:24.206
allow you to pair any meme coin on pump with tokenized stock or even commodity gold, any type of asset.

459
00:29:24.226 --> 00:29:27.147
So that seems to be the current narrative of choice.

460
00:29:27.207 --> 00:29:39.350
You do not think this has legs, as you said earlier, but it is providing some gasoline and energy to all of the, even some of the blue chip DeFi on the Robinhood chain.

461
00:29:39.410 --> 00:29:40.350
So most notably,

462
00:29:41.030 --> 00:29:43.131
Uniswap is absolutely pumping.

463
00:29:43.612 --> 00:29:45.373
So this is UniBurn.

464
00:29:45.393 --> 00:29:47.574
Of course, they have the fee burn now.

465
00:29:47.774 --> 00:29:50.896
I mean, for years, it was like UniToken, when burn, when burn.

466
00:29:50.936 --> 00:29:52.357
Now they have it, it's active.

467
00:29:52.377 --> 00:29:53.718
When fee switch.

468
00:29:53.758 --> 00:29:56.159
$200 million per year in burn.

469
00:29:56.219 --> 00:29:57.200
It's getting close to that.

470
00:29:57.360 --> 00:30:02.163
At least on the seven day, would you just say you shouldn't annualize a one-week chart?

471
00:30:02.303 --> 00:30:06.866
Well, if you did annualize the Uniswap burn, at least right now, $200 million.

472
00:30:07.026 --> 00:30:08.607
And a lot of that is on the back

473
00:30:09.247 --> 00:30:15.530
of this Robin Hood meme economy taking shape with stocks and with meme coins.

474
00:30:15.810 --> 00:30:19.131
But there is someone we've been talking about who is not too happy about it.

475
00:30:19.451 --> 00:30:21.672
This guy's name is Adam Aaron.

476
00:30:22.052 --> 00:30:32.136
He is the CEO of AMC and he said that line, I find this practice to be contemptible, outrageous, disgusting, despicable, it's vile.

477
00:30:32.596 --> 00:30:34.557
How can this possibly be legal?

478
00:30:34.597 --> 00:30:35.898
What's he talking about, David?

479
00:30:36.838 --> 00:30:42.842
He's not talking about meme coins, which is usually the words that you hear being pointed towards meme coins.

480
00:30:42.902 --> 00:30:45.863
He's talking about the tokenized stocks.

481
00:30:46.224 --> 00:30:47.244
His own stock, right?

482
00:30:48.005 --> 00:30:53.268
His own stock, AMC, is a tokenized stock on Robinhood chain.

483
00:30:53.768 --> 00:30:56.870
And that is the practice that he thinks is contemptible.

484
00:30:57.270 --> 00:30:59.992
Vlad Tenev, the CEO of Robinhood, he replied to this statement.

485
00:31:00.552 --> 00:31:06.100
very long paragraph of text on that Adam Aaron, the AMC CEO put on Twitter.

486
00:31:06.441 --> 00:31:08.243
He simply replied, what's the concern?

487
00:31:08.383 --> 00:31:09.044
Question mark.

488
00:31:10.016 --> 00:31:12.438
Aaron tweeted his reply.

489
00:31:12.458 --> 00:31:14.500
He's like, I'll tell you what the concern is.

490
00:31:15.061 --> 00:31:17.183
And then another very long paragraph of text.

491
00:31:17.603 --> 00:31:28.333
And then I never really got to the bottom of what he was really concerned about, other than how these stocks don't have shareholder rights, don't have governance rights.

492
00:31:28.713 --> 00:31:36.140
And so if you are an owner of the AMC tokenized stock, you aren't able to use that stock to govern over AMC.

493
00:31:37.355 --> 00:31:38.756
Does he really care about that?

494
00:31:38.856 --> 00:31:41.579
Is that really what he's concerned about?

495
00:31:41.679 --> 00:31:45.702
Is that some of his shareholders aren't able to participate in governance?

496
00:31:46.423 --> 00:31:48.224
That's what matters to him the most?

497
00:31:48.285 --> 00:31:54.450
It's kind of funny because wasn't AMC like one of the sort of GME type meme stuff?

498
00:31:54.470 --> 00:31:56.111
Yeah, it was GME adjacent.

499
00:31:56.151 --> 00:31:56.772
Yeah, for sure.

500
00:31:56.852 --> 00:32:04.215
I don't know why he's so angry because he's been in this game for a while, but he ends this second tweet, multiple paragraphs.

501
00:32:04.575 --> 00:32:12.037
I hereby call on you and Robin Hood to voluntarily cease and desist the trading of AMC stock tokens.

502
00:32:12.518 --> 00:32:14.358
You must cease and desist this.

503
00:32:15.459 --> 00:32:18.800
Vlad was actually on Squawk Box the following morning.

504
00:32:18.820 --> 00:32:18.960
Mm-hmm.

505
00:32:19.480 --> 00:32:20.341
asked about this.

506
00:32:20.921 --> 00:32:29.469
And I think he gives some details into the structure of these types of tokenized stocks and the rights they do confer and the rights they don't.

507
00:32:29.869 --> 00:32:30.730
Let's go play that clip.

508
00:32:30.950 --> 00:32:35.214
I kind of hear what you're saying, but I understand Adam Aronson's frustration with this.

509
00:32:35.654 --> 00:32:37.176
He's trying to build something.

510
00:32:37.236 --> 00:32:39.237
He's trying to continue to build something.

511
00:32:39.958 --> 00:32:45.403
And he wants investors who are interested and believe in his product to come to him, not to go through you.

512
00:32:46.203 --> 00:32:51.365
He thinks if they go to you instead of going to him, his stock price is not going to do as well.

513
00:32:51.825 --> 00:32:57.307
He points out validly that if they're going to you instead of him, they don't get a chance to vote as a shareholder.

514
00:32:57.427 --> 00:33:01.729
I can understand why a CEO would be frustrated and upset about that.

515
00:33:02.709 --> 00:33:05.270
What makes you think that other CEOs aren't going to think the same thing?

516
00:33:05.310 --> 00:33:14.334
Hey, if they're interested in buying shares of my company, they should buy it from me, not buy something that you've modeled to transfer off of it through you.

517
00:33:15.014 --> 00:33:20.440
that may in turn hurt my stock price because I'm not getting all the people who are interested in buying my stock buying it?

518
00:33:21.401 --> 00:33:24.124
I mean, I think that there's two things there.

519
00:33:24.705 --> 00:33:32.173
Number one, these are products available outside the US in 120 plus countries.

520
00:33:32.913 --> 00:33:35.656
And in a lot of those places,

521
00:33:36.697 --> 00:33:39.498
People don't have easy access to U.S. equities.

522
00:33:39.518 --> 00:33:42.139
There's no underlying brokerage infrastructure.

523
00:33:42.519 --> 00:33:46.120
There's no Robinhood where you can go on your app and buy shares.

524
00:33:46.641 --> 00:33:54.643
So we think a lot of this is actually net new business and the opportunity for these companies to access a whole new global.

525
00:33:54.663 --> 00:33:55.784
What's Adam Aronson get from it?

526
00:33:56.900 --> 00:34:02.524
Well, he gets access to a whole new shareholder base, people who have exposure to his stock.

527
00:34:02.544 --> 00:34:03.104
Who do.

528
00:34:04.125 --> 00:34:15.573
And because the tokens are backed one-to-one by underlying shares, there is stock purchase backing these tokens.

529
00:34:17.014 --> 00:34:18.916
So I think that's just a misconception.

530
00:34:19.176 --> 00:34:20.357
Obviously, their shares help.

531
00:34:20.377 --> 00:34:25.120
And just so I understand, because it's one-to-one, does the token come with all of the...

532
00:34:27.762 --> 00:34:35.787
Voting rights and everything else that's associated, dividends and the like, with owning the actual stock?

533
00:34:36.247 --> 00:34:37.868
It comes with dividends.

534
00:34:38.349 --> 00:34:45.593
Voting rights, not in this case, because it is a debt security and the shares are held as collateral.

535
00:34:46.233 --> 00:34:52.197
But again, that's not dissimilar to how an ADR or an ETF would function, right?

536
00:34:52.237 --> 00:34:56.180
If you have an ETF and you get exposure to an underlying...

537
00:34:56.900 --> 00:34:59.902
You're not voting in each underlying.

538
00:35:00.163 --> 00:35:01.504
Can Larry Fink vote?

539
00:35:01.584 --> 00:35:04.606
My stuff, I want to put him in charge, Vlad.

540
00:35:04.626 --> 00:35:05.867
I really like his politics.

541
00:35:06.427 --> 00:35:07.148
Is that possible?

542
00:35:08.349 --> 00:35:08.869
Can I designate this?

543
00:35:08.889 --> 00:35:09.690
We can look into that, Joe.

544
00:35:10.150 --> 00:35:10.651
Yeah, thanks.

545
00:35:11.771 --> 00:35:13.493
Vlad, can you vote the shares?

546
00:35:16.252 --> 00:35:26.597
Me personally, I mean, I know I'm saying is Robin Hood going to be voting the share in the same way that Joe is unhappy that Larry's voting shares, though it's his firm.

547
00:35:27.138 --> 00:35:30.419
Is Robin Hood voting those shares?

548
00:35:31.100 --> 00:35:36.702
I think that we haven't really announced plans for for the voting aspect of that.

549
00:35:39.388 --> 00:35:43.653
So, I mean, we can, we'll certainly share more if we have it.

550
00:35:44.174 --> 00:35:47.958
But again, there is established precedent for,

551
00:35:51.209 --> 00:36:13.310
creating these types of products and you know they they give exposure to these assets to people all over the world so I do think this is the future the entire financial industry is headed in this direction the US is is also working on innovation exemptions to allow for for tokenized securities out here

552
00:36:14.291 --> 00:36:21.619
And it'll take time to educate the issuers, the market, but we already see the benefits.

553
00:36:22.080 --> 00:36:29.788
And I think it's a little bit ironic in this case, because one of the benefits of tokenization is that you have instant settlement.

554
00:36:30.513 --> 00:36:43.865
So actually, the underlying reasons behind the GameStop and AMC issues in 2021 would largely be resolved with this new infrastructure.

555
00:36:43.885 --> 00:36:44.366
Okay.

556
00:36:44.906 --> 00:36:47.909
I thought Vlad made fantastic points there.

557
00:36:47.969 --> 00:36:53.554
And I actually really think that the concerns from the AMC CEO and even the SquawkBox hosts are just misunderstood.

558
00:36:53.574 --> 00:36:53.675
Yeah.

559
00:36:54.195 --> 00:37:00.718
They're like, okay, Vlad, you get a new investor base, but not the AMC, not the AMC corporation is just strong.

560
00:37:00.898 --> 00:37:02.199
It is a conduit.

561
00:37:02.679 --> 00:37:09.923
The Robinhood tokenized stocks is a conduit between a new investor base that would not have otherwise bought the stock and AMC.

562
00:37:10.483 --> 00:37:15.285
AMC does get the economic connection between these buyers.

563
00:37:15.505 --> 00:37:18.467
It doesn't get the shareholder governance connections, but honestly, who the hell cares?

564
00:37:19.347 --> 00:37:21.669
And AMC does get all the benefits.

565
00:37:21.949 --> 00:37:26.032
Robinhood and Vlad are not running interference or running interception.

566
00:37:26.052 --> 00:37:36.240
They are unlocking access on behalf of AMC or any other tokenized stock company and investors who wouldn't otherwise have access, which is the whole rest of the world.

567
00:37:36.641 --> 00:37:38.462
The meme coin people get their hands on it first.

568
00:37:38.622 --> 00:37:42.645
And that's always kind of distasteful for people who are not in the meme coin world.

569
00:37:43.386 --> 00:37:59.310
But the whole idea of like neo brokerages and tokenized docs on permissionless blockchains enabling access to people who do not have access to U.S. capital markets is a foundational point that should interest every single U.S. company.

570
00:37:59.871 --> 00:38:06.432
And all I'm seeing when I see the AMC CEO get upset is that like you didn't ask us permission.

571
00:38:06.613 --> 00:38:09.233
Like you didn't ask us if this is okay.

572
00:38:09.613 --> 00:38:11.254
But all of the benefits are...

573
00:38:11.974 --> 00:38:18.776
Almost, other than shareholder governance, almost one-to-one given straight back to the company who has issued a public equity.

574
00:38:18.836 --> 00:38:23.497
And so I think this is just actually fantastic marketing for Robinhood.

575
00:38:23.917 --> 00:38:27.677
And he gets to explain what these things are on Squawk Box.

576
00:38:27.757 --> 00:38:33.559
And so maybe this is just part of the process that we need to go through for the world to become normalized to tokenized stocks.

577
00:38:33.599 --> 00:38:34.619
And this is just what this looks like.

578
00:38:35.007 --> 00:38:38.789
Yeah, I mean, they're not tokenized stocks in their ideal form, right?

579
00:38:38.949 --> 00:38:40.630
So they're outside of the U.S.

580
00:38:40.870 --> 00:38:43.591
They're kind of, you know, outside U.S. jurisdiction.

581
00:38:43.731 --> 00:38:46.212
And this is because SEC rules, quite frankly.

582
00:38:46.292 --> 00:38:55.637
So we can get tokenized stocks that have all of the governance shareholder rights that the MCC, you know, CEO might want.

583
00:38:56.437 --> 00:39:00.339
And also, Vlad's point is ETFs don't even have those.

584
00:39:00.379 --> 00:39:02.460
I mean, they don't infer a governance right.

585
00:39:02.800 --> 00:39:09.604
But the broader point is like, I have no idea why this dude is so upset because like, it doesn't affect his existing shareholders.

586
00:39:09.724 --> 00:39:12.626
It just broadens his base of prospective shareholders.

587
00:39:12.746 --> 00:39:16.248
It's like net benefit, like there's nothing bad.

588
00:39:17.269 --> 00:39:18.169
They cost him nothing.

589
00:39:19.670 --> 00:39:28.437
The way I think he's interpreting it is that if they are buying the Robinhood tokenized share, they are not buying my actual equity.

590
00:39:28.597 --> 00:39:32.400
And therefore, I get none of the benefits because those things are completely decoupled.

591
00:39:32.440 --> 00:39:32.801
He's a CEO.

592
00:39:32.821 --> 00:39:33.261
But that's wrong.

593
00:39:33.341 --> 00:39:34.142
He's smart enough.

594
00:39:34.482 --> 00:39:35.643
He's smart enough to know this.

595
00:39:36.442 --> 00:39:52.934
It seems to be what he is arguing and what the Squawk Box hosts also don't understand is that these are near one-to-one representations and a $1 purchase of an AMC tokenized stock does equate to a $1 purchase of the AMC equity.

596
00:39:52.954 --> 00:39:53.374
It's funny.

597
00:39:53.414 --> 00:39:57.997
You could find meme coins distasteful, but that was not what his rant was about at all.

598
00:39:58.058 --> 00:39:59.859
No, it wasn't about the meme coins at all.

599
00:40:00.639 --> 00:40:04.981
Anyways, I hope that this actually does a lot of positive marketing for tokenized stocks.

600
00:40:05.282 --> 00:40:11.565
And that just adds fuel to the fire of this whole innovation that crypto finally has arrived that we've talked about for like a decade now.

601
00:40:12.525 --> 00:40:14.226
Tell me about the OpenAI case.

602
00:40:14.246 --> 00:40:16.507
Did they actually steal from a mathematician?

603
00:40:16.547 --> 00:40:17.248
What is the news here?

604
00:40:18.360 --> 00:40:23.785
Okay, so there is this like millennium math prize, a million dollar math problem.

605
00:40:24.046 --> 00:40:27.008
There's a few of these out there, like I think six or something.

606
00:40:27.589 --> 00:40:35.336
One of them got solved this last week thanks to the work of artificial intelligence, thanks to LLMs, thanks to intelligence.

607
00:40:36.137 --> 00:40:49.130
The drama here, the debacle here, is that the two people working on the problem, Tristan Buckmaster and Levent Alapataji, sorry, I butchered that last name, were working, they've been working on the problem.

608
00:40:49.150 --> 00:40:51.492
They are the two humans working on this problem.

609
00:40:52.153 --> 00:40:59.856
And they spent a year working on this problem using both Anthropic co-work and OpenAI codecs.

610
00:41:00.376 --> 00:41:05.978
And so they were working on this problem as humans do, but feeding this into OpenAI codecs.

611
00:41:06.539 --> 00:41:09.080
They had published something close to a breakthrough.

612
00:41:09.100 --> 00:41:12.281
They were coming very, very close to solving this math problem.

613
00:41:13.101 --> 00:41:24.230
And then OpenAI publishes the solution to the math problem about the same time as they were getting ready to release their paper talking about how close they were.

614
00:41:24.870 --> 00:41:34.478
And so this has created a bunch of drama about why is there a coincidence in timing between these two people who are using OpenAI codecs?

615
00:41:35.298 --> 00:41:43.645
almost nearly cracking this case, cracking this math problem, and then OpenAI does solve the problem and then releases their solution.

616
00:41:44.226 --> 00:42:01.080
And so there has apparently been reports, statements from Tristan Buckmaster, the mathematician who is the human behind this, about some sort of negotiation happening between them and OpenAI about who gets the credit.

617
00:42:01.680 --> 00:42:13.882
And OpenAI is happy to give the monetary prize to Tristan and his co-author Levant, but they still want to take credit for actually solving the problem.

618
00:42:14.342 --> 00:42:27.225
And the claim is that OpenAI took the inputs that Tristan and his co-mathematician Levant were putting into OpenAI codecs, and they were using that as a jumping off point

619
00:42:27.625 --> 00:42:33.887
And then OpenAI used a ton of compute to basically finish the job and truly solve the problem.

620
00:42:34.748 --> 00:42:36.428
There's privacy concerns here.

621
00:42:36.568 --> 00:42:38.369
There's provenance concerns here.

622
00:42:38.689 --> 00:42:44.811
And also one interesting bit is that the Levant character is an employee at Anthropic.

623
00:42:45.251 --> 00:42:54.915
And so in this negotiation between OpenAI and Tristan, the mathematician, they wanted Levant removed from the credit because they don't want anything associated with Anthropic.

624
00:42:54.935 --> 00:42:55.375
Yeah.

625
00:42:55.495 --> 00:43:04.861
And so this has triggered a bunch of people in the privacy world and the just like data sovereignty world to say, like, look at what OpenAI is doing.

626
00:43:05.201 --> 00:43:06.562
Probably also Anthropic 2.

627
00:43:07.022 --> 00:43:12.846
They are just consuming data and using it to train their models and inform their own processes.

628
00:43:13.426 --> 00:43:15.268
And these people are not your friends.

629
00:43:15.448 --> 00:43:16.048
They are not your friends.

630
00:43:16.068 --> 00:43:20.391
They will take your credit and they will take all the fame that they can associated with it.

631
00:43:21.139 --> 00:43:33.227
Okay, so the soft allegation here from Tristan is OpenAI basically stole my homework and now solved this as a result of basically my chat logs with OpenAI.

632
00:43:33.647 --> 00:43:39.011
And there's a word for this that comes to mind in crypto that we talk about all the time, which is the word front running.

633
00:43:40.432 --> 00:44:00.911
The allegation is that OpenAI front-ran these mathematicians, took their proprietary information, they thought this was a private chat, and then actually used it in order to get the prize, capture the notoriety, solve the problem, and front-run their user base.

634
00:44:01.692 --> 00:44:14.807
And I think that's a fascinating way to frame it and certainly brings to light, what actually do companies like OpenAI and Anthropic use the chat logs and data for?

635
00:44:15.227 --> 00:44:16.308
And by default, David...

636
00:44:17.089 --> 00:44:21.352
they can use any of your chat logs for internal training.

637
00:44:21.372 --> 00:44:23.353
It's sort of vague as to what they're doing.

638
00:44:23.493 --> 00:44:24.754
But like, that's the default.

639
00:44:25.294 --> 00:44:32.978
You have to turn that off in Anthropic, in Cloud, I should say, and also ChatGPT, if you want them to not do that.

640
00:44:33.038 --> 00:44:35.400
And even then, it's like, are they really doing it?

641
00:44:35.420 --> 00:44:36.501
It's a pinky promise.

642
00:44:36.601 --> 00:44:38.562
I mean, OpenAI came out and said,

643
00:44:39.102 --> 00:44:41.923
we didn't actually use any of these chat logs.

644
00:44:41.964 --> 00:44:48.067
They said, we cannot rule out that de-identified data derived from their usage of our product helped improve our models.

645
00:44:48.127 --> 00:44:52.249
But they're explicitly saying, no, we didn't steal these researchers' homework.

646
00:44:52.549 --> 00:44:54.830
And it's like very difficult to prove.

647
00:44:55.030 --> 00:44:56.151
Can you actually prove this?

648
00:44:57.211 --> 00:45:07.337
There's such an asymmetry in terms of a user's ability to like point at a large tech company like OpenAI and say, you stole from me.

649
00:45:08.337 --> 00:45:10.599
And I mean, how are they supposed to collect proof?

650
00:45:10.739 --> 00:45:15.642
We're like, where's, you know, so even the mathematicians here don't have evidence of this.

651
00:45:16.223 --> 00:45:20.185
But to your point, it really brings data sovereignty into the forefront.

652
00:45:20.486 --> 00:45:25.929
And I mean, is this part of the reason why some things are pumping like the VVV token?

653
00:45:26.010 --> 00:45:26.250
Like.

654
00:45:26.750 --> 00:45:29.351
You know, so the privacy meta is happening in crypto.

655
00:45:29.371 --> 00:45:36.495
It's just like people are realizing big tech does not have your back when it comes to data sovereignty, when it comes to privacy.

656
00:45:36.515 --> 00:45:42.858
And, you know, you could go with the anti-tech movement of like, OK, let's just go back to paper.

657
00:45:42.898 --> 00:45:43.919
Let's not use AI.

658
00:45:43.939 --> 00:45:45.660
Let's not use computers.

659
00:45:45.680 --> 00:45:51.763
Or you could go to kind of the crypto data sovereignty expression of this, which is like, hey, use tech.

660
00:45:52.163 --> 00:45:55.185
But users retain the sovereignty of their own data.

661
00:45:55.205 --> 00:45:55.305
Yeah.

662
00:45:56.150 --> 00:46:08.444
Like that's a message I feel like comes from crypto as part of the ethos and is maybe a reason why VVV is getting the uptick and some of the privacy tokens are doing well.

663
00:46:09.458 --> 00:46:18.361
Yeah, there are a couple of things I want to underscore here that I like if you just kind of try and remove the drama, some some things are worth stating.

664
00:46:18.961 --> 00:46:23.083
One is that it can be true that when OpenAI.

665
00:46:23.543 --> 00:46:28.485
So at OpenAI, a team of OpenAI employers and employees created a prompt.

666
00:46:29.005 --> 00:46:31.867
to solve the math problem in question.

667
00:46:31.907 --> 00:46:32.908
What's the name of the math problem?

668
00:46:32.968 --> 00:46:36.871
The Navier Stokes math problem, Millennium Prize problem.

669
00:46:36.931 --> 00:46:44.057
So OpenAI team members typed in a prompt to their own model, which I think was also like unreleased.

670
00:46:44.097 --> 00:46:46.579
It's not even the new ChatGPT6 model.

671
00:46:46.619 --> 00:46:50.442
It's something even more frontier that they have access to that no one else has access to.

672
00:46:50.923 --> 00:46:53.765
So they typed in a prompt that was like, solve this math problem.

673
00:46:54.982 --> 00:47:04.771
The model, it can be true that the model did not look at user data, but at the same time, the model itself was trained on the data anyways.

674
00:47:05.231 --> 00:47:07.373
And so the training can happen.

675
00:47:07.413 --> 00:47:16.562
So like when the mathematicians in question, Tristan and Levant, when they uploaded all of their drafts to OpenAI Codex,

676
00:47:17.690 --> 00:47:35.679
the OpenAI models are able to be trained on that data, but when the OpenAI researchers or users, the team members, typed in the prompt, solve this math problem, it can also be true that that data was not accessed because maybe they were actually, they didn't have their hands on the data.

677
00:47:35.719 --> 00:47:36.579
Both of those things can be true.

678
00:47:36.599 --> 00:47:42.582
So the LLMs can be trained on the data, but when the LLM is being prompted, it doesn't have access to the data.

679
00:47:42.622 --> 00:47:46.844
That is the gap that OpenAI didn't really close here, saying like, yeah,

680
00:47:47.224 --> 00:47:52.808
We're not using your data, but our LLMs are totally being trained on them is the thing that they did not say.

681
00:47:52.828 --> 00:47:54.148
Well, it's them benefiting from their data.

682
00:47:54.248 --> 00:47:57.551
And you made the point that that's actually part of the business model, right?

683
00:47:58.460 --> 00:47:58.860
Totally.

684
00:47:59.060 --> 00:48:04.484
That is the business model of Anthropic, OpenAI, and probably all of the Chinese models.

685
00:48:05.024 --> 00:48:11.308
Because if you are not using all of the data accessible to you... Not the Chinese models, probably not.

686
00:48:11.328 --> 00:48:14.110
Because Chinese models are just their open source, open way.

687
00:48:14.310 --> 00:48:15.891
Anyone can run the inference.

688
00:48:16.271 --> 00:48:19.173
I mean, I think it's less so the Chinese models.

689
00:48:21.693 --> 00:48:29.104
The point I want to make is that if you are in the arms race of model development, you need to get your hands on as much data as possible.

690
00:48:29.264 --> 00:48:29.725
That's right.

691
00:48:29.905 --> 00:48:33.591
If that's open AI, that's anthropic, and that's probably also Chinese models, too.

692
00:48:33.691 --> 00:48:35.894
You need to get your hands on as much data as possible.

693
00:48:36.475 --> 00:48:47.982
And so OpenAI and Anthropic, one of the benefits of being in the position of being a consumer product, a direct-to-consumer product, is you get to have first access to all of this data.

694
00:48:48.022 --> 00:48:55.247
If you are not using that data, you are disadvantaging yourself as a matter of principle to protect your user's data sovereignty.

695
00:48:55.407 --> 00:48:59.029
So Dario and Sam are like, I don't care about those principles.

696
00:48:59.169 --> 00:49:03.212
I will suck up as much data as possible to improve the product because I'm in an arms race.

697
00:49:03.692 --> 00:49:04.893
So that's what's happening.

698
00:49:05.133 --> 00:49:09.035
And so that's just kind of like the toxic nature of the AI arms race.

699
00:49:09.755 --> 00:49:10.376
It is what it is.

700
00:49:11.256 --> 00:49:15.598
Also zooming out, AI, LLMs solve this math problem.

701
00:49:16.479 --> 00:49:17.079
That happened.

702
00:49:17.379 --> 00:49:27.425
And so ignoring the drama about open AI or Anthropic and who gets credit and like the humans that did the work, whatever, whatever, whatever, we have a millennium math problem.

703
00:49:27.485 --> 00:49:29.846
One of the six math problems that got solved because of AI.

704
00:49:30.392 --> 00:49:35.936
And I think it's also worth like, it's shrouded by all this drama and this credit.

705
00:49:36.276 --> 00:49:39.718
But it's still cool that AI solving huge math problems.

706
00:49:40.459 --> 00:49:44.762
And we are still not yet at the final capabilities of these AI models.

707
00:49:44.822 --> 00:49:49.145
And so it's worth stating that we are solving very cool problems and the future is going to be sick.

708
00:49:49.705 --> 00:49:52.307
And meanwhile, we have all this drama along the way.

709
00:49:52.367 --> 00:49:56.069
But it is very, very cool that AI is solving massive math problems.

710
00:49:56.089 --> 00:49:57.330
Data sovereignty though, right?

711
00:50:00.172 --> 00:50:02.433
a Claude or an OpenAI, right?

712
00:50:02.553 --> 00:50:07.435
On their enterprise tiers, apparently, you know, there's legal contracts where they can't peep into your data.

713
00:50:08.055 --> 00:50:08.455
I don't know.

714
00:50:08.495 --> 00:50:08.996
There's a lot.

715
00:50:09.036 --> 00:50:17.219
But we don't know because once the data gets into the weights, the model weights of a LLM model are a black box.

716
00:50:17.619 --> 00:50:19.440
We don't know what data is in there.

717
00:50:19.700 --> 00:50:21.641
We just know that the weights are what they are.

718
00:50:21.721 --> 00:50:29.444
And once the data goes in there, you have no way to prove about whether your data got used to shift the tuning of those weights or not.

719
00:50:30.753 --> 00:50:35.357
It's all a big question of who's going to capture the value on top of all of the data.

720
00:50:35.838 --> 00:50:39.821
And more and more value seems to be captured by some of these frontier labs.

721
00:50:39.861 --> 00:50:42.504
And I think people are rightfully worried about that.

722
00:50:43.104 --> 00:50:48.089
Anyways, Venice, the platform that can't steal your data, is up 40% on the news.

723
00:50:48.269 --> 00:50:51.993
Also near push through like 20 or 30% up on the week this week.

724
00:50:52.673 --> 00:51:07.577
And the Near AI cloud platform, if you, listener, are interested in not having this happen to you, this is what Ilya and the Near team have been working on and have been building on, like self-sovereign, user-sovereign AI, user-owned AI.

725
00:51:08.177 --> 00:51:15.279
And so it's cool that in crypto, we have the antidote to this problem, all this drama that's happening in the AI arms race.

726
00:51:15.819 --> 00:51:18.200
And so Near AI, Near Sovereign AI,

727
00:51:19.350 --> 00:51:22.892
And so the Near AI cloud is built to exactly protect user data.

728
00:51:23.253 --> 00:51:28.977
And so shout out to Near and shout out to our partners at Near for helping build that and giving our users protection over their data.

729
00:51:29.557 --> 00:51:33.259
Ryan, are you ready to talk about the Hunter Biden laptop?

730
00:51:34.180 --> 00:51:36.542
I am, but I think we need a break for sponsors first, don't we?

731
00:51:37.528 --> 00:51:37.828
We do.

732
00:51:38.068 --> 00:51:43.391
And so we'll get right to the hottest story of the week right after we talk to some of these fantastic sponsors that make this show possible.

733
00:51:43.671 --> 00:51:44.351
Some exciting news.

734
00:51:44.411 --> 00:51:49.154
We are launching a new podcast to help people figure out the crypto cycle, how to navigate it.

735
00:51:49.254 --> 00:51:51.935
The best crypto cycle investor I know, his name is Michael Nato.

736
00:51:52.015 --> 00:51:53.076
He runs the DeFi Report.

737
00:51:53.136 --> 00:51:57.898
This is the guy that sent me a sell alert before the 1010 price drop happened.

738
00:51:58.078 --> 00:52:00.519
His cycle analysis has been absolutely on point.

739
00:52:00.620 --> 00:52:01.960
I've been following him for years.

740
00:52:02.120 --> 00:52:05.542
And this year we started recording weekly podcast episodes.

741
00:52:05.702 --> 00:52:13.466
Each one, we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle.

742
00:52:13.566 --> 00:52:15.967
There's new episodes that are released every Wednesday.

743
00:52:16.027 --> 00:52:16.747
They're 30 minutes.

744
00:52:16.827 --> 00:52:17.288
They're short.

745
00:52:17.328 --> 00:52:17.968
They're punchy.

746
00:52:18.088 --> 00:52:20.469
I think this crypto cycle is harder to navigate than most.

747
00:52:20.709 --> 00:52:21.950
So let's do it together.

748
00:52:22.090 --> 00:52:23.290
Go subscribe to this podcast.

749
00:52:23.350 --> 00:52:25.952
Search The DeFi Report wherever you get your podcasts.

750
00:52:26.012 --> 00:52:29.073
YouTube, Apple, Spotify, or find a link in the show notes.

751
00:52:29.213 --> 00:52:30.774
There's a new episode waiting for you now.

752
00:52:30.954 --> 00:52:38.078
On September 7th, the Wall Street Journal reported that Hunter Biden will be launching a meme coin called Laptop on the base chain.

753
00:52:38.718 --> 00:52:46.983
About four minutes later after the story broke, Hunter Biden posted the ticker and the date on X with a Fox News clip about said Laptop.

754
00:52:47.745 --> 00:52:57.727
The laptop, Biden said, Hunter Biden said, had been turned into a weapon against him, but he was turning it into a token, a symbol of resilience, redemption, and recovery.

755
00:52:58.187 --> 00:53:16.852
He would go after Trump's meme coin grift, citing nearly a million wallets that had collectively $3.8 billion in losses, and hashtag or ticker laptop, he promised, would be different and compensate all those people who lost money on the Trump meme coin grift.

756
00:53:18.412 --> 00:53:18.833
Oh, no.

757
00:53:19.433 --> 00:53:25.596
Anyways, after crashing 99%, Hunter Biden had to go to Twitter to defend the launch on X.

758
00:53:25.976 --> 00:53:45.547
He blamed predatory snipers and also claimed that no one on the Hunter Biden team or in the Hunter Biden insider circle were able to sell any tokens, which earned himself a community note, which identified multiple wallets receiving 100 million tokens, 10% of the supply, before the launch and sold them all.

759
00:53:48.045 --> 00:53:55.292
Okay, so if I had to just give you a formula, starting with the Libra coin, it's an insider wallet.

760
00:53:55.873 --> 00:53:57.194
Blame snipers.

761
00:53:57.795 --> 00:54:01.338
Say you're doing this for some positive reason.

762
00:54:01.358 --> 00:54:04.101
Wait, the Libra coin, the Argentina coin.

763
00:54:04.361 --> 00:54:06.183
The Malay, yeah.

764
00:54:06.203 --> 00:54:09.546
But I don't want to blame Malay because he was just kind of a useful idiot, unfortunately.

765
00:54:09.906 --> 00:54:11.628
But, like, we've seen this movie so many times before.

766
00:54:11.648 --> 00:54:12.089
A lot of those.

767
00:54:12.649 --> 00:54:13.250
We've seen this movie.

768
00:54:13.290 --> 00:54:13.810
Yeah.

769
00:54:13.830 --> 00:54:15.452
Like, say we're doing something good.

770
00:54:16.072 --> 00:54:17.153
Blame snipers.

771
00:54:17.474 --> 00:54:20.356
There's insider wallets that get allocation early.

772
00:54:20.717 --> 00:54:21.457
They sell.

773
00:54:22.418 --> 00:54:26.382
The person in question says that the team is locked up and can't sell.

774
00:54:26.822 --> 00:54:28.063
The token dumps 99%.

775
00:54:29.885 --> 00:54:41.518
It's like, if you wanted to write the most normal movie about a shitty meme coin launch and have nothing change whatsoever about the formula, this was it.

776
00:54:41.799 --> 00:54:46.784
Yeah, and you just swap out the political celebrity whatever with someone else and Vince Wash for Pete.

777
00:54:46.804 --> 00:54:47.265
Yeah, totally.

778
00:54:47.705 --> 00:54:48.266
Totally.

779
00:54:48.346 --> 00:54:48.986
Depressing.

780
00:54:49.046 --> 00:54:50.268
Depressing stuff, David.

781
00:54:50.788 --> 00:54:58.196
Also, why go against literally the world's greatest meme lord, Donald Trump, with a meme coin?

782
00:54:58.296 --> 00:54:59.937
Like, you're going to lose.

783
00:55:01.943 --> 00:55:05.746
MetaMask is spinning out of ConsenSys, which is interesting.

784
00:55:05.846 --> 00:55:08.568
MetaMask, of course, was part of ConsenSys.

785
00:55:08.608 --> 00:55:21.117
ConsenSys, kind of an early Ethereum conglomerate, but they had an enterprise structure with their L2, Linnea, Bezu, all their institutional products, and then they also had...

786
00:55:21.918 --> 00:55:27.162
this wallet, which is the MetaMask wallet, they are now splitting those two things into separate entities.

787
00:55:27.542 --> 00:55:29.624
So MetaMask is now off on its own.

788
00:55:30.044 --> 00:55:32.226
They're going to focus on the consumer use cases.

789
00:55:32.526 --> 00:55:36.309
You saw MetaMask rolled out like a MasterCard type product.

790
00:55:36.349 --> 00:55:38.150
You see where the future of that's going.

791
00:55:38.170 --> 00:55:42.193
It's kind of like consumer fintech meets crypto wallet.

792
00:55:42.774 --> 00:55:44.315
They're boasting... How many...

793
00:55:44.675 --> 00:55:45.276
users do they have?

794
00:55:45.296 --> 00:55:46.496
Like 30 million users?

795
00:55:46.897 --> 00:55:47.617
A ton of users.

796
00:55:47.697 --> 00:55:48.538
The most, yeah.

797
00:55:48.798 --> 00:55:50.199
On the MetaMask side of things.

798
00:55:50.339 --> 00:55:53.361
And then everything else is staying within consensus.

799
00:55:53.401 --> 00:55:58.765
Joe Lubin is actually going to be the CEO of the MetaMask product.

800
00:55:59.145 --> 00:56:01.947
Oh, 100 million downloads was the stat I wanted to give.

801
00:56:02.328 --> 00:56:04.769
No mask token in the announcement.

802
00:56:04.849 --> 00:56:07.851
So don't know if that's coming, if that's ever coming.

803
00:56:08.112 --> 00:56:09.793
That has been a rumor for a lot of years.

804
00:56:10.213 --> 00:56:14.156
But big news that MetaMask is now splitting out of consensus.

805
00:56:16.143 --> 00:56:16.604
IPO?

806
00:56:18.125 --> 00:56:18.505
I don't know.

807
00:56:18.545 --> 00:56:22.029
I mean, there have been rumors for a long time that consensus was going to IPO.

808
00:56:22.209 --> 00:56:24.331
This might be a step towards that.

809
00:56:25.092 --> 00:56:31.558
Consensus IPO-ing without MetaMask is much more why.

810
00:56:31.798 --> 00:56:34.220
Like, MetaMask and, like, one or two Inthura

811
00:56:34.961 --> 00:56:37.004
is the whole pie.

812
00:56:37.525 --> 00:56:46.617
And so MetaMask, I've mentioned this on the podcast many times before, is a auditing mess, if you will.

813
00:56:46.878 --> 00:56:48.200
They started in 2015.

814
00:56:48.360 --> 00:56:50.363
They paid their first employees with Ether.

815
00:56:50.643 --> 00:56:51.724
They didn't have payroll.

816
00:56:52.245 --> 00:56:53.125
There was no books.

817
00:56:53.385 --> 00:56:55.926
Like it was a complete jumbled mess in the beginning.

818
00:56:56.447 --> 00:57:04.909
And I'm sure that that is just like kind of unresolved because of how much of a spaghetti unorganized mess that consensus was in the first few years.

819
00:57:05.250 --> 00:57:06.750
I'm sure that they have shaped up.

820
00:57:06.910 --> 00:57:11.432
But like going back and fixing that is I don't really know how to take a company public.

821
00:57:12.212 --> 00:57:20.160
It's far easier and cleaner to spin out the things of consensus that make money and then have liquidity events on those things.

822
00:57:20.180 --> 00:57:21.301
Yeah, maybe that's what they do.

823
00:57:21.361 --> 00:57:23.904
Maybe there's going to be a MetaMask IPO is what you're saying.

824
00:57:23.944 --> 00:57:28.669
MetaMask IPO, Infura IPO, like IPO these things individually.

825
00:57:28.789 --> 00:57:33.614
And that's how Joseph Lubin and the consensus equity holders get their liquidity events.

826
00:57:34.799 --> 00:57:39.844
There was some news on the week from the Ethereum world about frame transactions.

827
00:57:40.045 --> 00:57:42.007
I think Vitalik put out a post.

828
00:57:42.567 --> 00:57:51.557
This is a feature that is going to be a headline feature, not in the next hard fork, not in Glamsterdam, which is supposed to still happen this year, 2026.

829
00:57:52.958 --> 00:57:56.939
But the one after that, Hogata, it's called in 2027.

830
00:57:57.499 --> 00:58:05.202
And frame transactions are going to be a headliner, a feature of that Hogata hard fork.

831
00:58:05.482 --> 00:58:06.482
Vitalik talked about it.

832
00:58:06.682 --> 00:58:08.283
Can you simplify it for us?

833
00:58:08.543 --> 00:58:10.563
And you're pretty bullish on it, actually.

834
00:58:10.864 --> 00:58:11.584
Can you tell me why?

835
00:58:11.604 --> 00:58:11.704
Yeah.

836
00:58:12.682 --> 00:58:13.563
Account abstraction, yeah.

837
00:58:13.623 --> 00:58:17.388
We've had account abstraction as a subject in Ethereum land for forever.

838
00:58:17.788 --> 00:58:22.333
Even Ethereum layer twos tried to beat the Ethereum layer one with account abstraction.

839
00:58:22.794 --> 00:58:24.596
Account abstraction is a smart wallet.

840
00:58:24.616 --> 00:58:27.519
It's actually kind of like hard to explain because it's a,

841
00:58:28.100 --> 00:58:29.661
It's conceptually very different.

842
00:58:30.121 --> 00:58:32.321
It is an alternative to externally owned accounts.

843
00:58:32.481 --> 00:58:42.745
And so rather than having a dumb wallet, kind of in the same way that like Bitcoin is kind of like a dumb blockchain, it's like a simple blockchain and Ethereum is a smart contract blockchain,

844
00:58:44.097 --> 00:58:52.741
externally owned accounts, which is your ledger, your MetaMask, your normal wallet, is a dumb wallet, and account abstraction is a smart wallet.

845
00:58:52.761 --> 00:58:53.881
It's programmable, right?

846
00:58:54.101 --> 00:58:58.003
So you could do stuff like you don't have to pay gas in ETH anymore.

847
00:58:58.063 --> 00:59:00.684
You could pay it in whatever token you have, including stable coins.

848
00:59:01.104 --> 00:59:05.185
An application can sponsor the gas fee, so you could have gasless transactions.

849
00:59:05.505 --> 00:59:09.967
You could have pass keys as sort of the private keys doing sign-ins.

850
00:59:10.007 --> 00:59:11.468
You can batch transactions.

851
00:59:12.448 --> 00:59:14.109
You can swap out private keys.

852
00:59:14.269 --> 00:59:22.671
You can have the same address, but a new private key, which is how actually much of Ethereum can become quantum proof, quantum resistant.

853
00:59:22.731 --> 00:59:27.973
When we were talking about like near two months ago or so becoming quantum resistant first, it's because they had this structure.

854
00:59:28.393 --> 00:59:35.635
And so you can easily swap out an address or a private key and have your front end address be the same.

855
00:59:35.735 --> 00:59:37.035
So that's what frame transactions are.

856
00:59:37.055 --> 00:59:38.755
It's limitless as to what you can do.

857
00:59:38.795 --> 00:59:40.356
But that's what frame transactions are.

858
00:59:40.496 --> 00:59:41.776
And it's coming in Hobata.

859
00:59:41.836 --> 00:59:51.318
Like, I guess I feel like we have been promised or we have talked about account abstraction so many different ways over the last like 10 years in Ethereum.

860
00:59:51.338 --> 00:59:51.778
Right.

861
00:59:51.918 --> 00:59:52.138
Right.

862
00:59:52.179 --> 00:59:55.003
Like at some level, I'm like, OK, like, cool.

863
00:59:55.063 --> 01:00:01.574
But like, why has it taken so long to get here and why is this now being prioritized?

864
01:00:02.255 --> 01:00:03.076
You have any thoughts on that?

865
01:00:04.996 --> 01:00:11.799
It was always prioritized in some sense, like it was always destiny to have merged into Ethereum in the future.

866
01:00:11.919 --> 01:00:12.940
Why did it take so long?

867
01:00:13.020 --> 01:00:22.144
Because Ethereum is a startup mentality or because Ethereum and the EF development is a nonprofit mentality, not a startup mentality.

868
01:00:22.484 --> 01:00:30.247
It would have been far better to have had account abstraction during the wave of mass building in crypto during 2020 through 2022.

869
01:00:31.848 --> 01:00:40.094
Having those synergies aligned, having all the builders plus account extraction would have been phenomenal for the development of not just Ethereum, but the industry at large.

870
01:00:40.214 --> 01:00:41.995
It's a shame that it has been taken so long.

871
01:00:42.375 --> 01:00:46.718
It has a shame that crypto as a whole and Ethereum as a whole has taken so long.

872
01:00:47.339 --> 01:00:48.300
Why is it taking 10 years?

873
01:00:49.100 --> 01:00:53.223
Because Ethereum is a decentralized system, we needed to argue on standards.

874
01:00:53.283 --> 01:00:56.485
We didn't have as much data now as we did then.

875
01:00:56.705 --> 01:01:01.709
I think on account abstraction, though, people forget there were like precursor EIPs to this, like multiple things tried.

876
01:01:01.729 --> 01:01:11.576
Do you remember there's the ERC 4337, which is just basically, while it would have to adopt it, that would be more account abstraction.

877
01:01:11.616 --> 01:01:12.717
The adoption levels...

878
01:01:13.357 --> 01:01:15.078
you know, never really took off.

879
01:01:15.238 --> 01:01:18.700
It didn't really become kind of the default choice for wallets.

880
01:01:18.940 --> 01:01:27.804
But at least that like tested out the idea of smart accounts and programmability and how that would work inside of the Ethereum network.

881
01:01:27.824 --> 01:01:35.348
So I feel like now that we have those building blocks in place, there's more, you know, it's battle tested, I suppose.

882
01:01:35.408 --> 01:01:39.490
And so now they can go all in on frames and just make it part of the core protocol.

883
01:01:39.890 --> 01:01:47.973
But the big reason I think this is prioritized, David, is because like you're going to need to replace signatures due to quantum.

884
01:01:48.513 --> 01:01:52.075
The signatures in Ethereum are not quantum secure.

885
01:01:52.535 --> 01:01:53.815
Those have to be replaced.

886
01:01:54.175 --> 01:02:00.898
Ethereum also, the EF came out this week and said by 2029, we want to have the entire Ethereum stack.

887
01:02:01.518 --> 01:02:02.679
quantum secure.

888
01:02:03.179 --> 01:02:03.499
Okay.

889
01:02:03.539 --> 01:02:05.340
So that's a lot of things to replace.

890
01:02:05.821 --> 01:02:06.721
This is one of them.

891
01:02:07.161 --> 01:02:09.843
This I think is why the EF has prioritized.

892
01:02:09.883 --> 01:02:12.485
I don't think it was because of better UX.

893
01:02:12.605 --> 01:02:17.348
I think they haven't cared about that as much as other things.

894
01:02:17.768 --> 01:02:25.452
I think it was really quantum signatures that kind of pushed it as this, like, we have to have this in order to get to our deadline in 2029.

895
01:02:25.472 --> 01:02:26.213
That's how I read it.

896
01:02:27.175 --> 01:02:34.487
Yeah, I do remember talking, I can't remember which EF researcher it was, when the first iteration of account abstraction got merged for 4337.

897
01:02:36.327 --> 01:02:40.089
like account abstraction had been discussed in 2016 and 2017 and 2018.

898
01:02:40.449 --> 01:02:40.769
Yes.

899
01:02:41.190 --> 01:02:47.813
And then it got put onto the shelf and then it finally had its first implementation in 2023 with 4337.

900
01:02:47.913 --> 01:02:57.999
And like one of the researchers, the quote that like resonates in my brain was like, this just proves that there was no good reason for why we put account abstraction on the shelf in the first place.

901
01:02:58.099 --> 01:02:59.780
We could have had this forever ago.

902
01:03:00.620 --> 01:03:01.200
And that was in 2023.

903
01:03:01.220 --> 01:03:01.541
Yeah.

904
01:03:01.561 --> 01:03:08.625
And so like, once again, beat a horse, beat a dead horse to answer your question, why did it take 10 years?

905
01:03:09.105 --> 01:03:10.026
There's no good reason.

906
01:03:10.386 --> 01:03:10.706
Yeah.

907
01:03:10.726 --> 01:03:13.588
Other than like, there was no forcing function other than quantum.

908
01:03:13.928 --> 01:03:14.589
Right, right.

909
01:03:14.689 --> 01:03:16.210
Well, I guess GLAAD

910
01:03:16.530 --> 01:03:18.611
we have quantum as a forcing function.

911
01:03:18.851 --> 01:03:19.492
I'm not sure.

912
01:03:19.512 --> 01:03:23.254
I'm not sure the reason, but getting it next year, that is the big news.

913
01:03:24.235 --> 01:03:25.155
David, let's end with this.

914
01:03:25.395 --> 01:03:28.957
So next week, the Clarity Act, it's do or die week.

915
01:03:29.117 --> 01:03:31.259
They vote on cloture.

916
01:03:31.999 --> 01:03:35.881
Odds on Polymarket are about 15% right now.

917
01:03:36.381 --> 01:03:38.682
People think it's going to fail because- It's 15% that it passes.

918
01:03:38.722 --> 01:03:39.543
That it passes.

919
01:03:39.563 --> 01:03:41.664
So the odds of failure are 85%.

920
01:03:42.724 --> 01:03:47.967
The reason is because the ethics language hasn't really been, that bridge hasn't been crossed.

921
01:03:48.007 --> 01:03:56.031
Probably the Democrats also just don't want to throw another bone to crypto or to Trump, any things on his agenda prior to midterms.

922
01:03:56.071 --> 01:03:58.892
So I don't think this is going to happen.

923
01:03:58.912 --> 01:04:00.213
Right.

924
01:04:01.435 --> 01:04:05.445
are you bothered by this or like, Hey, 15% is not zero.

925
01:04:05.465 --> 01:04:07.590
15% is like,

926
01:04:09.473 --> 01:04:10.094
It's possible.

927
01:04:10.194 --> 01:04:10.995
We'll see where it goes.

928
01:04:11.135 --> 01:04:11.936
We'll see where it goes next week.

929
01:04:11.956 --> 01:04:12.516
It could happen.

930
01:04:12.897 --> 01:04:15.159
Bankless Nation, thanks for sticking with us another week.

931
01:04:15.499 --> 01:04:18.482
Hopefully this is the start of a very long and glorious bull market.

932
01:04:18.762 --> 01:04:20.744
And if it is, we will be here along the way.

933
01:04:20.784 --> 01:04:24.008
Crypto is risky, however, but not risky enough.

934
01:04:24.048 --> 01:04:27.711
The institutions are landed, so we are going even further west.

935
01:04:28.232 --> 01:04:28.853
This is the frontier.

936
01:04:28.873 --> 01:04:31.395
It's not for everyone, but we are glad you were with us on the Bankless Journey.

937
01:04:31.595 --> 01:04:32.016
Thanks a lot.