WEBVTT

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Bankless Nation, it is the first week of October and the bearish market structure broke.

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The weekly Bitcoin candle and in addition to that, the monthly Bitcoin candle both closed above the previous May high.

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I think the big question for the entire market to answer is that is this a green light for Uptober?

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Ryan, do you remember Uptober last year?

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Oh my God, you said it.

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You cursed us now.

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We're all doomed.

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You and I were very excited for Uptober last year.

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And the first week of Uptober last year was like a little bit green and we were kind of excited.

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Yeah.

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And then we said Uptober too many times and we cursed it.

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And the rest of the month sucked.

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And it became downtober.

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Yeah, it was bear market-tober.

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It was bear market-tober.

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But that was last Uptober.

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That was last October.

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We still have Uptober possibly on the menu for this month.

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Well, I think a question to be answered is what's macro doing and could that disrupt our, I'm not going to say it, our October?

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Because there's a little bit of a paradox going on in markets.

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Inflation came in kind of cool, but the 10-year yields are going sky high and they're not stopping.

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Ben Hunt said this week, something in the financial world is going to break when referring to these yields.

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We'll talk about that.

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Also, David, you went to the Hood Summit.

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I did.

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I was there yesterday.

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That was in Houston, Texas.

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I did.

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I want to know why you went, what Robinhood is shipping.

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I'll find out all about that because I saw a lot of announcements coming out, but you were on the ground.

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I want to get your impressions on that as well.

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Also, there was a $400 million BitGet hack.

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We had an exchange hack on Friday of last week.

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And also that has turned into a conversation around near intense and the permissionless nature of that system and whether crypto wants that or not.

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Also, New York has sued Polymarket.

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A federal court has ruled that states can regulate Calci.

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And it seems like we're all taking this to the Supreme Court is just looking more and more inevitable these days.

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So we're going to cover all of this and more.

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But first...

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We're starting with the market.

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Once again, the Bitcoin weekly candle closed above the May high of this year.

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So the weekly candle closed was the highest Bitcoin price that we've had since like early January of this year.

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That is also true for the October monthly candle as well.

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The September you mean?

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The September.

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Don't get out of your cell.

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September, excuse me.

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September.

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We are now in October 2020.

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Thank you.

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giving us potentially a green light, a runway for more bullishness in the remaining three weeks of this month.

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I don't know what your quant is saying, David, but my quant, Michael Nadeau, has also signed off on what you just said.

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Yes, nice.

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He has said we are in the early bull and we got the confirmation this week because we got a second weekly close, what you just said, above the 50-week moving average, which is 76.8K.

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And we got a close above that 84.5K.

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So the last objection people had

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which was like, are you sure?

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Is this sustained?

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I mean, the chart is rejecting that.

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And if this chart doesn't hold, not to say we couldn't go down, we may still go down, but if this overall structure, the structure that you said has broken now in an upward direction, broken the back of the bear market, if that doesn't hold,

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After these, you know, monthly averages are locked in, then it will be the first time ever it hasn't hold it.

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So that feels like a good foundation from a crypto market structure to just say we are in the early bull phase.

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Speaking of good foundations, I do kind of enjoy, I don't really enjoy it because it's financially painful, but nonetheless, we are seeing some weakness in some alts for the first time.

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Oh.

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Lit is down 30% from the highs.

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Wait, wait, what are you enjoying about this?

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The buying opportunity?

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Are you getting like that?

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No, I'm fully allocated.

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I got no cash.

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But it's just like this is... You enjoy the pain of markets, right?

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I enjoy the pain.

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I'm a little bit of a masochist.

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You know, my financial era was born by buying like $1,000 ETH in 2017 and having that go to $80.

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And still believing.

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And still believing and then making that all back in 2020, 2021.

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And so it's just important that we just get a breather.

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Prices go down.

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There's some pain in the market for that to not be too frothy.

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We don't want to have a blow off top too soon.

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And things had gotten really frothy in like those five assets.

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Like Zcash, for example, down 20%.

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Morpho down 17%.

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Uni down 17%.

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While all these tokens had painted between like 50% and 300% gains in the last like two or three months.

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Kind of in the same way that like this Bitcoin bear market, if we are indeed at the very beginnings of another four year cycle, there's bull market ahead of us.

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That was the easiest bear market of all time.

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If this is the only dip that we get, it's going to be one of the easiest dips in altcoins in the last like three months.

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I could see more pain being on the table.

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It feels about right.

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But also at the same time, there is just a new pattern happening in the crypto market right now.

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And so I think this is kind of something to pay attention to is like how how volatile are we to the downside these days?

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Because so far, Bitcoin is saying not not that volatile to the downside.

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Well, this is like just probably some mean reversion here, right?

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Because alts, as you said, had been on the tear.

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Do you ever look at the Glassnode altcoin season index?

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Look at this.

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We got into almost like full altcoin season zone, and we're taking a spin down from that.

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The last time we got here was like,

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way last summer when things pumped.

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And you could see some other phases when that has happened in the past.

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So this is a little bit just mean reversion after these massive leaps.

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And, you know, Bitcoin has been up so much, what, like 44% since the June lows?

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96%.

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of the top 50 crypto assets actually beat Bitcoin over the last 30 days.

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So Bitcoin's already up.

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That's like all of them other than one.

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Pretty much.

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The following 48 tokens by market cap beat Bitcoin in the last how long?

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That's right.

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30 days.

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The last month.

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Yeah, last month.

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One other thing that might be weighing a little bit on altcoin markets or in general, we have to weight this into where crypto is going from here in the early bull case is inflation and yields.

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And there is a story emerging that is somewhat of a paradox.

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So firstly, we got inflation numbers in this week, and the print was actually better than expected.

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So annualized inflation, that's CPI, 3%, whereas expectations were about 3.3%.

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So below expectations,

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Also, the numbers were revised down from previous numbers in July.

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So July was actually revised down.

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And most of this was driven by high energy costs.

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So it was price of the pump, gas, oil, that type of thing that was really the driver.

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So inflation number's good.

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And in a normal world, in a normal market, what you'd expect to see is as inflation cools,

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longer or lower long-term yields on bonds, right?

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And the reason for this- If the monetary asset is stronger over longer time horizons, people will accept less yields over that time.

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Exactly.

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So if you get a good inflation print, a low inflation print, you'd expect yields to fall.

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That's typically what happens.

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This time that didn't happen.

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So this week-

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I think yields rose more than they had in all weeks previous.

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Like this was the fast acceleration of yield to the upside this week than like the last four weeks we've been reporting this.

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Exactly.

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And so here's a tweet.

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So yields continue to rise even on the back of this inflation news, not even budging from that.

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The 30 year is up to 5.64 percent.

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It's highest since 2022.

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2022.

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No, no, no.

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2002.

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Oh my God.

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Sorry.

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Yes.

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2002.

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Dyslexia.

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The highest since 2022.

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A little dyslexia on that readout.

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And the 10 year is back to 5.3%.

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So yield's going crazy.

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Wow.

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Wow.

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What do you think is happening?

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5.3% yield is going crazy.

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Well, that is crazy.

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I mean, this is the biggest market in the world.

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This is the risk-free rate for capital around the world.

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We haven't seen these rates and this velocity and trajectory since before 2022.

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Right.

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Yeah.

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Yeah.

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Basically, our financial lifetimes, because I was not paying attention to the bond market in 2002, Ryan, let me tell you.

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Yeah.

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Well, so I saw some tweets in the week, including this one from a friend of the show who's been on before.

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I haven't had him on in a while, though.

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Ben Hunt.

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He said this, not to be alarmist or anything, but this move in the 10 year, in the 30 year, isn't oil or Iran related.

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He says that because oil was actually down in the week.

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Something in the financial world is going to break.

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That's what he said.

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Not to be an alarmist about things.

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If there's one thing I know about having Ben Hunt on the podcast is that he's kind of an alarmist.

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Sometimes he's right, though, right?

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Yes, yes.

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Not to discredit him in any particular way.

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He's just like, he's a bit of a, yeah, alarmist.

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Well, the mechanism here, the thing that he's worried about, isn't necessarily the raw number yet.

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Although that is something to be alarmed at.

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It's the speed at which this is happening.

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Mm-hmm.

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This is like yields are going up so quickly.

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We haven't seen that, as you said, in your entire investing lifetime.

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And a lot of investors feel the same.

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So he thinks something could break.

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What do you think?

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Do you think this is like...

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The sign of something going really wrong.

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And this is why maybe Besant is panicking and he's trying to buy the long end and do all the intervention that he's been talking about lately.

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Why else would he be doing that if we were if everything was normal?

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When when something as large as the bond market moves this violently, something is going to break like somebody somewhere.

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Business, hedge fund, whatever is positioned in a way where this really fucks their shit, to use a technical term.

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Does that mean, like, catastrophically, this messes with everything in the whole world?

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I'm not totally convinced.

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I was listening to Jim Bianco on his recent podcast.

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He just started a podcast.

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I think he's like five or six episodes in.

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He's a Bond guy.

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He knows Bond.

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He's a big Bond guy.

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Big Bond guy.

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And he was talking about how the whole world is freaking out because we haven't seen these rates in so long.

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Like, 5.6% is such a high number.

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And he's like, never.

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Unprecedented.

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Unprecedented.

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He's like, no, no, no, no, no.

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Like, if you go back into the history of bond market yields, of yields and interest rates, like 5.6% is a totally normal number.

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You know what's an absurd number?

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Anything below two.

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And so, granted, ever since- That was the weirdness.

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Not now, right?

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That was the weirdness.

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The whole ZERP era, post-2008, even pre-2008, that whole thing has been distorted.

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And finally, the clock has run out on the era of low interest rates.

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But that was the weird stuff.

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And 5.6% is a totally normal number.

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I think that's right.

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Other bond people I'm listening to are saying the same thing.

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You know, I mentioned Howard Marks last week.

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Also, Michael Howell is someone who covers this fairly well.

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And he made the point that 5.3 percent, it was normal in the 90s.

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In the 80s, yields were 10 to 15 percent.

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And for huge periods during the 80s, the U.S. economy is growing like gangbusters.

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It's like boom times.

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The economy is growing right now.

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And it's also outside of AI as well.

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Like consumer spending is up.

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There are plenty of healthy indicators in the economy.

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There is a take here, though, that you see this is in the move indicator.

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This is something else that Howell follows.

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He calls it kind of the heartbeat of bonds and sort of his heartbeat metric for a global liquidity.

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And it's almost like the VIX.

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Do you know the VIX for stocks?

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Yeah.

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This is what the move index is for bonds, right?

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So it's a marker volatility and jitters.

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When the VIX spikes, everyone is glued to TV screens and Twitter because something happened.

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Something big happened.

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And you can see some spikiness, like here's the ultimate bond spikiness on the move index back in 2008.

240
00:12:44.433 --> 00:12:46.835
Do you remember what was happening there?

241
00:12:46.895 --> 00:12:49.756
So we've got some spikiness right now.

242
00:12:50.076 --> 00:12:59.240
And Michael Howell's conjecture is he's watching that because if you get further spikiness, it is an indicator that liquidity conditions are shrinking, basically.

243
00:12:59.280 --> 00:13:00.781
So global liquidity is shrinking.

244
00:13:00.801 --> 00:13:02.242
As the spike spikes.

245
00:13:02.682 --> 00:13:05.204
As the spike spikes, liquidity shrinkage.

246
00:13:05.565 --> 00:13:08.727
And liquidity shrinkage is bad for our bags.

247
00:13:08.807 --> 00:13:10.829
It's bad for debasement trade.

248
00:13:10.849 --> 00:13:14.192
It means there's less fiat money supply in the market.

249
00:13:14.752 --> 00:13:20.097
And so he's watching this because he thinks there's the case where things could get bad before they get good.

250
00:13:20.677 --> 00:13:21.898
So basically VIX spikes.

251
00:13:22.399 --> 00:13:27.623
And then in response to that government's besant, Warsh, everybody has to respond with some policy.

252
00:13:27.643 --> 00:13:29.345
That policy is going to be money printing again.

253
00:13:29.945 --> 00:13:34.949
And on the other side of that is launched the next global liquidity cycle.

254
00:13:34.969 --> 00:13:39.833
So he thinks that we're somewhat in a cycle wind down as far as global liquidity goes.

255
00:13:40.233 --> 00:13:44.156
And the next cycle will begin when there's some sort of jitteriness and crisis.

256
00:13:44.216 --> 00:13:51.462
So that could cause crypto assets to still dip, even though we're talking about this as if it's an early bull market.

257
00:13:51.662 --> 00:13:52.883
And that's one possibility there.

258
00:13:52.903 --> 00:13:58.288
I'm not saying it's the only possibility, but it's something that some of my quants are saying, David.

259
00:13:58.843 --> 00:13:59.123
Yeah.

260
00:13:59.223 --> 00:13:59.483
Yeah.

261
00:13:59.583 --> 00:14:02.444
I can kind of see it where the, what do we call this?

262
00:14:02.604 --> 00:14:04.444
The, not the, the bond, what's the bond market?

263
00:14:04.484 --> 00:14:05.365
The move.

264
00:14:05.565 --> 00:14:05.925
The move.

265
00:14:06.345 --> 00:14:09.006
So the, the bond market VIX, I like that name better actually.

266
00:14:10.366 --> 00:14:14.747
The thing to watch is like how spiky that's going to get or is something going to like a break?

267
00:14:14.807 --> 00:14:17.688
Is a seal going to burst per what Ben Hunt is saying?

268
00:14:18.088 --> 00:14:24.350
We're all glued to the news cause some bank went over third bailout of the banks or whatever.

269
00:14:24.370 --> 00:14:24.430
Uh,

270
00:14:25.650 --> 00:14:28.411
liquidity disappears because everyone has to cover their debts.

271
00:14:28.431 --> 00:14:30.492
You know, Bitcoin crashes, crypto crashes.

272
00:14:30.792 --> 00:14:33.573
But then there's a flood of liquidity after the fact.

273
00:14:33.593 --> 00:14:35.213
Like, that's the pattern that we've all seen.

274
00:14:35.553 --> 00:14:37.134
I feel like that would be the worst case scenario.

275
00:14:37.154 --> 00:14:39.715
There's probably a much easier case scenario.

276
00:14:40.155 --> 00:14:46.297
Like, either way, when the VIX for bonds stops being so spiky and it eases out,

277
00:14:46.877 --> 00:14:55.627
The process of it easing out has got to be bullish just because, great, volatility is leaving the bond market, stability is coming back to the markets.

278
00:14:56.068 --> 00:15:06.080
And Bitcoin has seemingly done acceptably well while the fix of the bond market has been spiky, which would be the time where you would expect it to not be doing well.

279
00:15:06.748 --> 00:15:10.390
Yeah, and it's going to continue to do well because deficits continue to mount.

280
00:15:10.730 --> 00:15:14.692
The U.S. fiscal policy continues to not improve, just get worse, of course.

281
00:15:14.712 --> 00:15:16.833
And that's the debasement trade.

282
00:15:16.853 --> 00:15:19.254
So maybe investors are seeing kind of the long-term picture here.

283
00:15:19.694 --> 00:15:26.637
And another simple explainer for yields, in addition to kind of the fiscal situation, is just what we've been talking about, what Howard Marks pointed out.

284
00:15:26.637 --> 00:15:34.105
pointed out in his memo last week, which is AI CapEx, AI debt is competing against treasuries for those yields.

285
00:15:34.606 --> 00:15:35.727
The economy is booming.

286
00:15:36.148 --> 00:15:40.072
And so yields are going to go up the way they went up in the 1980s.

287
00:15:40.412 --> 00:15:46.259
And this is not actually in that context, that alarming, except for the fact that

288
00:15:46.619 --> 00:15:50.221
The whole world is now based on the AI trade.

289
00:15:50.562 --> 00:15:52.703
And, you know, that could be alarming.

290
00:15:53.063 --> 00:15:56.305
Again, if we have all the eggs in those baskets and something happens with that.

291
00:15:56.645 --> 00:16:05.411
There was also this other minor point, David, that Kobayashi I saw made, which is they did something sneaky on the inflation methodology this month.

292
00:16:05.991 --> 00:16:07.893
So they actually changed it.

293
00:16:08.493 --> 00:16:11.054
They changed how inflation was calculating.

294
00:16:11.494 --> 00:16:12.395
There's some details here.

295
00:16:12.415 --> 00:16:13.555
They revised it back.

296
00:16:13.995 --> 00:16:20.318
But they basically, according to Kobayashi, they recategorized some things like portfolio management, investment advice, put it in a different category.

297
00:16:21.378 --> 00:16:24.019
And... Is this like gerrymandering for inflation?

298
00:16:24.139 --> 00:16:25.260
It's goalposts moving.

299
00:16:25.520 --> 00:16:27.881
It's gerrymandering for inflation a little bit.

300
00:16:27.921 --> 00:16:32.202
And he said that alone could have knocked about 20 basis points off inflation.

301
00:16:32.242 --> 00:16:33.243
That could be the explainer.

302
00:16:33.283 --> 00:16:33.363
So

303
00:16:33.643 --> 00:16:38.624
The other reason yields could be up is just the markets not buying these inflation numbers because there's a little bit of goalposts moving.

304
00:16:39.425 --> 00:16:45.046
That's some Soviet-style accounting is the idea that comes to mind.

305
00:16:45.086 --> 00:16:46.527
That's never good.

306
00:16:46.627 --> 00:16:50.608
I mean, it's good in the short term because, like, we can all trade on paper and hot air.

307
00:16:51.308 --> 00:16:54.609
But, yeah, over the long time, markets need truth.

308
00:16:54.789 --> 00:16:57.710
And if the government's not giving us truth, that's, like, a terrible, terrible thing.

309
00:16:57.830 --> 00:17:00.774
I think the bond markets are really good at sussing out truth.

310
00:17:00.794 --> 00:17:01.595
Binding truth, yeah.

311
00:17:01.635 --> 00:17:01.815
Right?

312
00:17:01.835 --> 00:17:04.298
Like there's nothing, there's no escaping bond markets.

313
00:17:04.318 --> 00:17:08.123
Soviet era accounting, but in the United States of America, it doesn't actually work.

314
00:17:08.383 --> 00:17:08.844
That's right.

315
00:17:08.924 --> 00:17:10.406
That's right.

316
00:17:10.426 --> 00:17:11.607
So, I don't know.

317
00:17:11.788 --> 00:17:12.368
Are you bullish?

318
00:17:12.388 --> 00:17:14.932
How are you feeling about things with this macro context?

319
00:17:15.670 --> 00:17:17.812
Can I, I want to throw a few things your way.

320
00:17:18.833 --> 00:17:19.915
We haven't talked about oil.

321
00:17:20.135 --> 00:17:22.618
Oil is actually still at wartime highs.

322
00:17:22.698 --> 00:17:26.201
So there was the war, the height of the Iran war conflict.

323
00:17:26.562 --> 00:17:29.685
Oil spiked up to $90 to $110.

324
00:17:29.825 --> 00:17:31.267
It came down to like $60.

325
00:17:31.387 --> 00:17:33.449
It is now back up to $93 a barrel.

326
00:17:33.469 --> 00:17:35.311
So oil is at wartime highs.

327
00:17:36.212 --> 00:17:38.714
The bond market yields are cratering up.

328
00:17:39.414 --> 00:17:40.374
That's scary.

329
00:17:41.215 --> 00:17:44.377
The midterms are coming next month, and the markets never really like midterms.

330
00:17:45.537 --> 00:17:50.120
And the Hormuz situation is as resolved, unresolved as ever.

331
00:17:50.860 --> 00:17:58.104
But if you take all of these things into account, the resolution of all of those things is bullish.

332
00:17:58.485 --> 00:18:01.907
Bond market yields are one day going to stop cratering to the upside.

333
00:18:01.927 --> 00:18:02.027
Yeah.

334
00:18:02.868 --> 00:18:04.089
Oil prices are high.

335
00:18:04.390 --> 00:18:09.295
They can't really go much higher because there actually is a secret oil flowing through the Strait of Hormuz.

336
00:18:09.655 --> 00:18:15.962
The Iran war, the Iran and the Trump administration are in tension and that's unresolved, but that could get resolved.

337
00:18:16.523 --> 00:18:19.386
Any way that this falls out is bullish.

338
00:18:19.686 --> 00:18:21.288
Like the status quo is,

339
00:18:21.828 --> 00:18:23.209
is all of these things are bad.

340
00:18:23.309 --> 00:18:28.633
Like the oil is high, yields are high, midterms are coming up, that's giving the market the jitters.

341
00:18:28.993 --> 00:18:33.196
And Bitcoin painted a higher monthly and weekly candle despite all of those things.

342
00:18:34.277 --> 00:18:39.380
The default path seems to be that Bitcoin is like bullish despite all of those things.

343
00:18:39.440 --> 00:18:42.643
But then all of those things could fall one by one like dominoes.

344
00:18:43.143 --> 00:18:49.888
And so I'm kind of seeing like, okay, Bitcoin has done well in a very hostile market environment for the last like two months.

345
00:18:50.728 --> 00:18:52.170
Each one of those things could clear up.

346
00:18:52.550 --> 00:18:54.051
We will get past the midterms.

347
00:18:54.412 --> 00:18:57.115
Bond yields will stop accelerating to the upside.

348
00:18:58.276 --> 00:19:01.739
The Iran war and the Hormuz will eventually resolve.

349
00:19:02.019 --> 00:19:09.227
And all of that, those are each one of those things are catalysts that I'm seeing can see happen in the next quarter to a year.

350
00:19:09.247 --> 00:19:09.327
Wow.

351
00:19:09.687 --> 00:19:18.235
I think what you're saying is like given the debasement that's on the horizon, we can clearly see given crypto market structure has fundamentally changed to the upside.

352
00:19:18.615 --> 00:19:19.015
Right.

353
00:19:19.155 --> 00:19:24.060
And given some of these other things could get resolved, it's riskier to be offside.

354
00:19:24.540 --> 00:19:24.760
Yeah.

355
00:19:25.121 --> 00:19:25.521
Right now.

356
00:19:25.621 --> 00:19:27.202
You want to be allocated.

357
00:19:27.723 --> 00:19:28.363
This is me.

358
00:19:28.424 --> 00:19:29.545
I'm trying to be bullish, Ryan.

359
00:19:30.145 --> 00:19:32.687
This is me trying to be bullish.

360
00:19:32.867 --> 00:19:34.349
I think it's a pretty good perspective.

361
00:19:34.970 --> 00:19:36.051
Yeah, I do too.

362
00:19:36.431 --> 00:19:43.075
And coming up next, David, I want you to give me the perspective, give Bankless listeners the perspective on Robinhood Hood's conference.

363
00:19:43.596 --> 00:19:45.357
What did you see over there in Houston?

364
00:19:45.377 --> 00:19:46.037
What are they up to?

365
00:19:46.217 --> 00:19:48.239
AI agents controlling portfolios?

366
00:19:48.279 --> 00:19:49.460
Are they doing anything in crypto?

367
00:19:49.900 --> 00:19:53.722
Also, there was a $400 million crypto hack last week.

368
00:19:54.143 --> 00:19:58.826
Has some implications for a lot of things and there's a bit of discussion going on about it.

369
00:19:58.886 --> 00:19:59.686
I want you to fill me in.

370
00:19:59.826 --> 00:20:03.509
All this and more, but before we get there, we want to thank the sponsors that made this possible.

371
00:20:03.929 --> 00:20:21.023
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372
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373
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374
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375
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376
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377
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378
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379
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380
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381
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382
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383
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384
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385
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386
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387
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388
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389
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390
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391
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392
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394
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396
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397
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398
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399
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400
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Cheers.

401
00:22:06.112 --> 00:22:07.053
This is Frank Shapiro.

402
00:22:07.093 --> 00:22:09.295
Big news out of the Robinhood's Hood Summit today.

403
00:22:10.035 --> 00:22:11.656
He mentions a few bullet points.

404
00:22:11.696 --> 00:22:14.118
24-7 stock trading, including weekends.

405
00:22:14.638 --> 00:22:16.800
Corporate earnings prediction markets.

406
00:22:17.320 --> 00:22:20.403
I guess corporate earnings, you can open up prediction markets on that.

407
00:22:20.483 --> 00:22:21.764
Perpetual futures for...

408
00:22:22.304 --> 00:22:30.131
U.S. customers, it says eligible U.S. customers, by the way, AI trading and also a social trading platform.

409
00:22:30.451 --> 00:22:35.055
This kind of reminded me of like, you know, the FOMO app that's been picking up in crypto, Robinhood's version of that.

410
00:22:35.536 --> 00:22:38.258
All of those were some of the highlights that Frank mentions.

411
00:22:38.599 --> 00:22:39.660
I'm not sure if he was there.

412
00:22:40.060 --> 00:22:41.101
You were there in person.

413
00:22:41.121 --> 00:22:41.461
I was there.

414
00:22:41.621 --> 00:22:43.483
Why did you like give me the context?

415
00:22:43.543 --> 00:22:44.464
Why did you decide?

416
00:22:44.924 --> 00:22:45.124
I know.

417
00:22:45.785 --> 00:22:47.247
You don't go to every conference, of course.

418
00:22:47.267 --> 00:22:48.269
There's lots of things you don't go to.

419
00:22:48.289 --> 00:22:50.632
I've gone to very few conferences this year, actually.

420
00:22:50.652 --> 00:22:52.215
I think this might have been my first.

421
00:22:52.295 --> 00:22:53.436
You prioritized this one.

422
00:22:53.476 --> 00:22:54.057
Why this one?

423
00:22:54.157 --> 00:22:55.880
And what was the news coming out of it?

424
00:22:55.920 --> 00:22:57.002
What was the vibe, the news?

425
00:22:57.142 --> 00:22:58.384
What's your feeling?

426
00:22:59.185 --> 00:23:00.707
I mean, Robinhood has just captured

427
00:23:00.907 --> 00:23:05.869
such a centerpiece of attention in the crypto industry seemed worth going.

428
00:23:06.170 --> 00:23:13.153
They also invited me to speak with their two kind of like crypto leads, Nicola White and Hillary Skeffington.

429
00:23:13.893 --> 00:23:17.455
One is the like VP of products who's doing all the crypto product stuff

430
00:23:17.735 --> 00:23:20.157
And Nicola White, she leads Bitstamp.

431
00:23:20.478 --> 00:23:22.300
So Robinhood bought Bitstamp a while ago.

432
00:23:22.320 --> 00:23:23.881
Nicola was doing market making in crypto.

433
00:23:23.901 --> 00:23:27.004
Now she leads the Bitstamp and like the crypto integration.

434
00:23:27.665 --> 00:23:29.667
So this was actually their trad conference.

435
00:23:29.687 --> 00:23:37.494
They kind of do this on-off thing with the Hood Summit, which is their normal Robinhood equities brokerage trad fi conference.

436
00:23:37.554 --> 00:23:39.256
That's what you were at, the Hood Summit.

437
00:23:39.296 --> 00:23:40.137
Which is what I was at.

438
00:23:40.277 --> 00:23:42.099
And then next week.

439
00:23:42.339 --> 00:23:44.681
And also previously they did their crypto event.

440
00:23:44.761 --> 00:23:48.644
The most recent one you'll remember was in London with Johan Cabrat.

441
00:23:48.824 --> 00:23:51.026
And that's when they launched the Robinhood chain and all the other stuff.

442
00:23:51.427 --> 00:23:52.908
This was their trad conference.

443
00:23:52.928 --> 00:23:57.191
And so we were not, I was not expecting crypto things out of this conference.

444
00:23:57.372 --> 00:23:59.033
And that is what we got.

445
00:23:59.053 --> 00:24:00.474
It was mostly trad stuff.

446
00:24:00.574 --> 00:24:02.256
And yeah, it's all fusing together, right?

447
00:24:02.276 --> 00:24:04.778
Because even Bitstamp is a crypto thing, isn't it?

448
00:24:04.798 --> 00:24:05.038
Yeah.

449
00:24:05.498 --> 00:24:11.341
So that's kind of like, well, then David, the crypto podcaster, why were you moderating a panel at the Trad Robinhood conference?

450
00:24:11.361 --> 00:24:17.284
Well, because perps, tokenized stocks, Morpho, these things are now all in the main Robinhood app.

451
00:24:17.424 --> 00:24:18.064
That's kind of cool.

452
00:24:18.424 --> 00:24:19.285
That's why they brought me in.

453
00:24:19.965 --> 00:24:20.485
And so.

454
00:24:20.906 --> 00:24:21.586
What are they up to then?

455
00:24:22.006 --> 00:24:23.347
What's the, what are the highlights for you?

456
00:24:23.967 --> 00:24:28.768
So the highlights you had to run through with Frank Shapar, they opened up with 24-7 markets.

457
00:24:28.948 --> 00:24:31.188
So you can kind of see the priority and emphasis that they had.

458
00:24:31.608 --> 00:24:32.389
I thought it was pretty funny.

459
00:24:32.409 --> 00:24:38.130
They showed a bunch of Donald Trump truth social posts and tweets about the Iran war conflict.

460
00:24:38.150 --> 00:24:40.830
And they're like, wouldn't you have liked to trade these things?

461
00:24:40.850 --> 00:24:42.290
That happened over the weekend, right?

462
00:24:42.330 --> 00:24:44.251
Because they happened over the weekend.

463
00:24:44.291 --> 00:24:45.291
Well, now you can.

464
00:24:45.311 --> 00:24:46.551
And I thought that was pretty funny.

465
00:24:46.571 --> 00:24:47.471
It's great.

466
00:24:47.491 --> 00:24:49.712
Product market fit in this crazy era of tweets.

467
00:24:49.972 --> 00:24:51.752
Wait, but like, how are they able to do that?

468
00:24:52.232 --> 00:24:53.278
Why couldn't we do that before?

469
00:24:53.298 --> 00:24:54.827
How come we can suddenly do that now?

470
00:24:56.070 --> 00:24:57.911
I would like to actually explore that a little bit more.

471
00:24:57.991 --> 00:25:06.576
Part of the answer does come from having tokenized assets trading on Bitstamp because it's a 24-7, 365 marketplace.

472
00:25:06.736 --> 00:25:12.939
And so part of that answer is that they also have just extended their own brokerage services to beyond ours.

473
00:25:13.699 --> 00:25:21.643
And so like if one Robinhood user is buying an asset and another Robinhood is selling an asset and they both happen to be doing that at 8 p.m. on a Tuesday, they can just clear those things.

474
00:25:22.464 --> 00:25:25.225
And so they're just pushing the left and right earlier

475
00:25:25.505 --> 00:25:26.146
and later on the day.

476
00:25:26.186 --> 00:25:31.951
It seems so obvious and such a, like, product market fit for how people want to trade these markets now.

477
00:25:32.071 --> 00:25:32.712
Yeah, yeah.

478
00:25:32.852 --> 00:25:38.237
It was very clear that, like, if you were, the Hood Summit and all the products they were releasing is for, like, speculators.

479
00:25:38.397 --> 00:25:39.938
It is not for the investor.

480
00:25:40.139 --> 00:25:41.180
Robin Hood and their, like,

481
00:25:41.966 --> 00:25:47.770
Their words that they use is like, we are for the day traders, the speculators, the people on margin and leverage.

482
00:25:47.790 --> 00:25:49.291
Like, these are for you.

483
00:25:50.511 --> 00:25:52.853
The passive investor was not really a target audience here.

484
00:25:53.773 --> 00:25:54.694
But yeah, anyways.

485
00:25:54.714 --> 00:25:57.095
Okay, so that was one of them.

486
00:25:57.115 --> 00:25:59.477
The 24-7 trading was like definitely the headline thing.

487
00:25:59.897 --> 00:26:03.641
So prediction markets for earnings reports, I actually thought this was pretty interesting.

488
00:26:04.201 --> 00:26:13.110
They opened this section up with, hey, isn't it really frustrating when you're bullish on earnings and then you are correct, but then the price of the asset goes down in price?

489
00:26:13.210 --> 00:26:14.031
Isn't that annoying?

490
00:26:14.051 --> 00:26:18.496
Well, now you can just have exposure to an earnings report with a predictions market.

491
00:26:18.836 --> 00:26:19.096
Nice.

492
00:26:19.156 --> 00:26:19.557
And so...

493
00:26:19.817 --> 00:26:29.603
I actually think of all the prediction markets that society hates, I feel like this one should not be included in them because it's a financial derivative about a financial company.

494
00:26:29.623 --> 00:26:30.844
It's just so finance coded.

495
00:26:31.204 --> 00:26:32.945
It's not like it's not sports gambling.

496
00:26:33.105 --> 00:26:34.106
It's not betting on the weather.

497
00:26:34.887 --> 00:26:41.831
So I kind of I really like this category of prediction markets because it's a financial product about finance.

498
00:26:41.891 --> 00:26:43.092
Even Vitalik would approve.

499
00:26:44.492 --> 00:26:45.513
Yeah.

500
00:26:45.593 --> 00:26:50.055
The crypto element was the perpetual in the main Robinhood app.

501
00:26:50.155 --> 00:26:51.095
And so this was the big...

502
00:26:51.116 --> 00:26:51.456
Wait, wait.

503
00:26:51.796 --> 00:26:53.377
For U.S. users?

504
00:26:53.397 --> 00:26:54.517
For U.S. users.

505
00:26:55.238 --> 00:26:55.958
Eight markets.

506
00:26:56.678 --> 00:27:00.420
Bitcoin, ETH, Sol, XRP, Doge, Cardano, Link, and Hype.

507
00:27:00.801 --> 00:27:05.803
And so for some U.S. users, they're rolling this out to a few select users.

508
00:27:06.003 --> 00:27:06.844
They're going to get feedback.

509
00:27:06.864 --> 00:27:07.924
They're going to roll it out to even more.

510
00:27:07.944 --> 00:27:10.446
They're going to get feedback, and then one day they'll roll it out to everyone.

511
00:27:10.466 --> 00:27:10.786
Yeah.

512
00:27:11.968 --> 00:27:18.254
I thought the interesting thing was they asked the audience, like, raise your hand if you've ever traded a perpetual or you know what a perpetual is.

513
00:27:18.795 --> 00:27:23.179
And, like, less than one-fifth of the audience raised their hands.

514
00:27:23.479 --> 00:27:23.700
What?

515
00:27:23.740 --> 00:27:25.401
I thought that was really interesting.

516
00:27:25.421 --> 00:27:26.382
What are they doing?

517
00:27:26.883 --> 00:27:27.223
Options?

518
00:27:27.343 --> 00:27:28.324
Options, yeah.

519
00:27:28.344 --> 00:27:34.691
You're telling me this is a trader, tradify crowd, and they hadn't, like, four-fifths of the audience had not used a perp.

520
00:27:35.211 --> 00:27:36.071
Yeah, that's what they said.

521
00:27:36.191 --> 00:27:36.352
Yeah.

522
00:27:36.612 --> 00:27:39.813
And maybe the audience just doesn't really raise their hand.

523
00:27:39.833 --> 00:27:40.654
That's always kind of a bias.

524
00:27:40.674 --> 00:27:47.257
But they asked earlier in the show, like, how many people are you guys going to buy an iPhone duo?

525
00:27:47.297 --> 00:27:51.419
Because they are building out a custom Robinhood app for the iPhone duo, like the twofold one.

526
00:27:51.599 --> 00:27:51.859
Oh, wow.

527
00:27:51.919 --> 00:27:54.280
And like a third of the audience raised their hands.

528
00:27:54.440 --> 00:27:56.281
So it wasn't the audience being shy.

529
00:27:56.561 --> 00:27:56.901
Okay.

530
00:27:57.341 --> 00:27:59.142
The audience was willing to raise their hands.

531
00:27:59.382 --> 00:28:04.265
So more of the audience is interested in buying an iPhone duo than has traded a perp before.

532
00:28:04.285 --> 00:28:04.385
Yeah.

533
00:28:05.645 --> 00:28:11.809
So this is also the perpetual is also being offered through their Bitstamp exchange.

534
00:28:11.949 --> 00:28:13.010
And so they bought Bitstamp.

535
00:28:13.170 --> 00:28:19.474
It has the CFTC license that allows them to offer this to U.S. customers, U.S. users.

536
00:28:19.914 --> 00:28:26.498
And so when somebody on Robinhood main app goes and does a 10x Bitcoin long or a 10x Bitcoin short, it routes it through Bitstamp.

537
00:28:28.000 --> 00:28:29.802
One of the big news on the week was LIDAR.

538
00:28:29.862 --> 00:28:32.906
The LIDAR token was down like 20%, 30% on this week.

539
00:28:33.247 --> 00:28:37.893
It was from disappointment that this was not LIDAR being the service provider in the back end.

540
00:28:38.553 --> 00:28:40.534
Wait, so I know you've been following Leiter.

541
00:28:40.614 --> 00:28:41.535
You're a Leiter bull.

542
00:28:42.056 --> 00:28:44.177
Robinhood does have a partnership with Leiter.

543
00:28:44.477 --> 00:28:47.860
In the Robinhood wallet, which is their crypto app.

544
00:28:47.920 --> 00:28:50.001
It's like their MetaMask or Phantom.

545
00:28:50.121 --> 00:28:51.122
It's the Robinhood wallet.

546
00:28:51.442 --> 00:28:53.083
Okay, so they're doing both plays.

547
00:28:53.323 --> 00:28:57.807
It's Bitstamp for the main Robinhood wallet and kind of the whole buttoned up version.

548
00:28:57.967 --> 00:29:01.209
And then Leiter for the more crypto native wallet.

549
00:29:01.289 --> 00:29:06.213
And also non-US because Leiter does not have a CFTC exchange license.

550
00:29:06.453 --> 00:29:06.693
Right.

551
00:29:06.873 --> 00:29:07.253
Got it.

552
00:29:07.273 --> 00:29:11.296
So Leiter's still in the picture, but I guess there was some hope out there, market hope.

553
00:29:11.656 --> 00:29:12.036
Yeah.

554
00:29:12.056 --> 00:29:16.338
I mean, the distribution difference between being in the main Robinhood app versus the Robinhood wall is massive.

555
00:29:17.219 --> 00:29:20.621
And so there was like a lot of disappointment from the Leiter Bulls on the timeline.

556
00:29:21.381 --> 00:29:27.205
The answer as to like why did Robinhood not put in Leiter is Leiter doesn't have a CFTC exchange license.

557
00:29:27.425 --> 00:29:28.305
You have to have that.

558
00:29:28.345 --> 00:29:30.847
It's just like the conversation stops there.

559
00:29:31.687 --> 00:29:38.471
Robinhood bought Bitstamp so they could do stuff like this, trade 24-7 tokenized assets and do perpetuals.

560
00:29:38.751 --> 00:29:41.112
And they have the CFTC exchange license.

561
00:29:41.132 --> 00:29:42.152
That's why they did this.

562
00:29:42.793 --> 00:29:52.938
I think the question is, is in the future, if and when LIDAR does get its CFTC license, will then Robinhood also route orders to LIDAR?

563
00:29:53.678 --> 00:29:58.500
Or will it actually just keep it for itself and only flow it through Bitstamp?

564
00:29:58.520 --> 00:30:00.140
Because why would they share it with anyone else?

565
00:30:00.180 --> 00:30:01.881
Like they will just route it through their exchange.

566
00:30:02.441 --> 00:30:07.343
Maybe Leiter does give better execution and Windows will always give better execution than Bitstamp.

567
00:30:07.483 --> 00:30:09.463
But Robinhood doesn't care because they get the fees.

568
00:30:09.884 --> 00:30:11.344
So like that's the fork in the road.

569
00:30:12.344 --> 00:30:13.885
You can interpret things both ways.

570
00:30:14.685 --> 00:30:19.527
The CFTC license to coming to Leiter, which I think is coming to Leiter inevitably, is

571
00:30:20.067 --> 00:30:22.491
I think we will know this inside of two months.

572
00:30:22.812 --> 00:30:23.533
What are you laughing at?

573
00:30:23.633 --> 00:30:28.640
I'm just laughing because I think I saw your tweet where it was like, flew all the way to Houston.

574
00:30:28.920 --> 00:30:30.483
For Robin Hood to bud my bags.

575
00:30:30.503 --> 00:30:33.147
Yeah, to Robin Hood for my lighter bags to be down 20%.

576
00:30:33.187 --> 00:30:33.647
Yeah.

577
00:30:33.667 --> 00:30:34.969
That's great.

578
00:30:35.850 --> 00:30:38.231
I'm sorry, man, but maybe it's only a matter of time.

579
00:30:38.391 --> 00:30:39.951
It just takes some time.

580
00:30:40.111 --> 00:30:51.135
We are going to find out whether or not Leiter gets a CFTC license inside of like two months because they've been talking about it for a while, and the CFTC has 180 days to give a response.

581
00:30:51.555 --> 00:30:53.556
Well, we know the Vlads are very tight.

582
00:30:53.696 --> 00:30:55.016
So that's great.

583
00:30:55.056 --> 00:30:57.277
There was a couple other things I want to ask you about.

584
00:30:57.357 --> 00:30:59.338
One was the social trading element.

585
00:30:59.478 --> 00:31:03.560
So somebody described this to me as like, it's almost like the crypto FOMO type of experience.

586
00:31:03.580 --> 00:31:05.940
There's a social trading thing that they were talking about.

587
00:31:06.501 --> 00:31:10.822
And then also agents, AI agents.

588
00:31:11.102 --> 00:31:12.703
What, you can get an AI agent to like manage your trades?

589
00:31:12.723 --> 00:31:15.144
How many times have you heard about agentic trading, Ryan?

590
00:31:16.504 --> 00:31:19.666
That's been all crypto has talked about for the last like 18 months, I feel like.

591
00:31:19.686 --> 00:31:20.566
Have you ever used it?

592
00:31:21.495 --> 00:31:23.837
I would not trust, like, right now, no.

593
00:31:23.877 --> 00:31:25.318
Like, actually, I would like to.

594
00:31:25.338 --> 00:31:29.482
I would like to give an agent, like, you know, a couple hundred bucks and just... See what happens?

595
00:31:29.762 --> 00:31:29.982
Yeah.

596
00:31:30.203 --> 00:31:39.771
Okay, so during this section, I'm like, agentic trading, you can now, you get the power of hedge funds brokerage information advantage inside of Robinhood using agentic trading.

597
00:31:40.071 --> 00:31:42.594
And I just turned to the guy next to me.

598
00:31:42.674 --> 00:31:43.314
I didn't know him.

599
00:31:43.414 --> 00:31:44.455
We were just strangers.

600
00:31:44.816 --> 00:31:48.359
And I just asked him, I was like, who the fuck is doing agentic trading?

601
00:31:49.120 --> 00:31:52.011
And then he opens up his phone to the agentic trading tab.

602
00:31:52.031 --> 00:31:53.095
He's like, me, I'm doing it.

603
00:31:53.115 --> 00:31:53.838
I'm doing it.

604
00:31:54.747 --> 00:31:58.748
Yeah, he had given his agent like $2,000 and his agent had done a bunch of trades.

605
00:31:58.788 --> 00:31:59.889
And I'm like, okay, fuck me.

606
00:31:59.909 --> 00:32:00.849
Wait, what do you do?

607
00:32:00.869 --> 00:32:01.730
So like, how does this work?

608
00:32:01.750 --> 00:32:10.433
Do you just like, hey, agent, you know, generate overperforming like performance over the next 90 days.

609
00:32:10.473 --> 00:32:11.273
Make no mistakes.

610
00:32:11.373 --> 00:32:11.573
Go.

611
00:32:11.593 --> 00:32:16.435
I think it's one of those things where like the quality of the output is downstream of the quality of the input.

612
00:32:16.555 --> 00:32:21.236
And so you need to prompt pretty well and be like, okay, like I am interested in this kind of exposure.

613
00:32:21.256 --> 00:32:22.757
I'll be cautious about this.

614
00:32:22.937 --> 00:32:46.810
don't know I still haven't used it but I feel like any input I would give would make it like dumber probably I just I don't want to give the input to the agent you know what I mean I want right the genius super smart agent working for me and to figure it all out but then I feel like someone has already front run me on that is some other hedge fund is using a much more powerful agent better data I don't know I don't know okay

615
00:32:47.868 --> 00:32:53.252
Maybe you could just kind of, if you set a strategy, maybe you could just like automate a strategy.

616
00:32:53.533 --> 00:32:56.075
In that context, I would be okay with it.

617
00:32:56.515 --> 00:32:58.456
Yeah, yeah, yeah.

618
00:32:58.476 --> 00:32:58.897
Let's see.

619
00:32:58.977 --> 00:32:59.437
Anything else?

620
00:32:59.477 --> 00:33:01.979
Yeah, Robinhood Social, they launched, you said it was like FOMO.

621
00:33:02.059 --> 00:33:03.140
It's like FOMO and Fintway.

622
00:33:03.160 --> 00:33:06.583
It feels a little bit more like a little bit more trad than FOMO.

623
00:33:06.863 --> 00:33:09.806
because this is definitely built by millennials and FOMO is built by Zoomers.

624
00:33:11.088 --> 00:33:12.249
But it's very similar.

625
00:33:12.269 --> 00:33:17.175
So like verified trades, verified PNL, it's like a Twitter kind of form factor.

626
00:33:17.195 --> 00:33:17.996
Yeah.

627
00:33:19.418 --> 00:33:19.838
Very good.

628
00:33:20.018 --> 00:33:21.240
That's the conference.

629
00:33:21.380 --> 00:33:22.801
There was also a hack in,

630
00:33:23.402 --> 00:33:29.026
that we should talk about, a $400 million hack of the BitGet exchange.

631
00:33:29.146 --> 00:33:31.088
Did that happen earlier this week or late last year?

632
00:33:31.108 --> 00:33:32.509
That was Friday of last week.

633
00:33:32.549 --> 00:33:33.530
Friday of last week.

634
00:33:33.650 --> 00:33:36.472
BitGet, if you're not familiar, it's an offshore exchange.

635
00:33:36.512 --> 00:33:40.415
So outside the U.S., it's one of the biggest offshore exchanges.

636
00:33:40.655 --> 00:33:41.756
Top five, let's say.

637
00:33:41.776 --> 00:33:43.978
It's definitely not of the scale, Binance.

638
00:33:44.378 --> 00:33:48.761
And it was a $351 million hack.

639
00:33:49.102 --> 00:33:51.884
What are the details behind this and what was the conversation it spawned?

640
00:33:52.424 --> 00:33:55.226
Yeah, so not a crypto or protocol hack.

641
00:33:55.246 --> 00:33:58.668
This is just a kind of a hack of BitGet's internal security.

642
00:33:59.289 --> 00:34:00.310
Just the hot wallets, right?

643
00:34:00.410 --> 00:34:01.050
Not the cold wallets.

644
00:34:01.070 --> 00:34:02.591
Yeah, just the hot wallets, not the cold wallets.

645
00:34:03.032 --> 00:34:08.275
So attackers spoofed internal transfer data and drained hot and warm wallets across multiple chains.

646
00:34:09.096 --> 00:34:10.297
Private keys were not stolen.

647
00:34:10.377 --> 00:34:11.638
Private keys were not lost.

648
00:34:12.538 --> 00:34:20.824
But the total sum of the losses came to about $387 million, which is the largest exploit loss of crypto in 2026 so far.

649
00:34:22.365 --> 00:34:26.466
I had to kind of explain the technical terms of like how it all worked, but I don't really understand it.

650
00:34:26.526 --> 00:34:28.887
But it was an internal BitGet security thing.

651
00:34:29.767 --> 00:34:34.808
There was, there is a $464 billion protection fund from BitGet.

652
00:34:34.848 --> 00:34:38.169
And so users are whole, not no user will lose any money.

653
00:34:39.469 --> 00:34:41.410
Withdrawals were paused and then they resumed.

654
00:34:42.090 --> 00:34:44.790
And so kind of nice that no users were harmed in this exploit.

655
00:34:45.330 --> 00:34:46.811
I think it's probably North Korea.

656
00:34:46.871 --> 00:34:47.911
I think is the assumption here.

657
00:34:47.931 --> 00:34:51.112
There's like, that's the Lazarus group that did this, but I'm not sure if that's actually confirmed.

658
00:34:51.652 --> 00:34:51.792
Um,

659
00:34:52.653 --> 00:34:54.594
A lot of the assets moved through ThorChain.

660
00:34:55.235 --> 00:34:57.137
ThorChain said they can't do anything about it.

661
00:34:57.637 --> 00:34:58.438
I'm sure Taylor Monahan.

662
00:34:58.458 --> 00:34:59.139
After they were stolen.

663
00:34:59.359 --> 00:35:03.403
So the assets were stolen by, let's say, a hacker like Lazarus Group.

664
00:35:03.683 --> 00:35:08.208
Then the next thing is the hacker has to then launder those funds in order to get liquidity on them, right?

665
00:35:08.688 --> 00:35:09.089
Exactly.

666
00:35:09.309 --> 00:35:10.030
Yeah.

667
00:35:10.730 --> 00:35:13.313
ThorChain is a pretty common place for these funds to go.

668
00:35:14.274 --> 00:35:18.277
A bunch of Bitcoin did go through Wasabi CoinJoin, which is a Bitcoin mixer.

669
00:35:18.717 --> 00:35:23.201
And then about half a million dollars tried to go through Near Intense.

670
00:35:23.281 --> 00:35:26.724
And this is when the story moves into the Near Intense space.

671
00:35:26.744 --> 00:35:31.668
So Near Intense is an application on top of the Near blockchain that does cross-chain transfers.

672
00:35:32.589 --> 00:35:39.815
$500,000 about dollars tried to go through Near Intense, and Near Intense has this shield thing.

673
00:35:40.095 --> 00:35:47.642
It's like a security filter, like a bouncer that checks every swap before it goes through Near Intense.

674
00:35:48.143 --> 00:35:52.527
Alex, the general manager of Near Intense, he kind of describes it as like a risk intelligence layer, kind of like...

675
00:35:53.047 --> 00:35:56.791
Yeah, a bouncer, cops, preventing... Firewall almost, I guess.

676
00:35:56.811 --> 00:35:59.094
Firewall, I think that's a good term, yeah.

677
00:35:59.374 --> 00:36:04.039
So $166,000 did get through, but it blocked about $503,000.

678
00:36:05.180 --> 00:36:06.762
This spawned kind of a conversation.

679
00:36:06.782 --> 00:36:10.006
These aren't really the biggest numbers, but it spawned a conversation around...

680
00:36:10.026 --> 00:36:12.048
These are tiny numbers in the context of $350 million, right?

681
00:36:12.348 --> 00:36:16.389
Yeah, but really the conversation was around the permissionless, around near intense.

682
00:36:16.709 --> 00:36:22.251
Near, due to the crazy price action going from like $2 to $5, is now kind of the center of attention.

683
00:36:22.751 --> 00:36:29.374
And so the, you know, the hardcore cypherpunk nature of some of these systems is being, you know, we're kicking the tires here.

684
00:36:30.254 --> 00:36:38.056
And I think people are learning that near intense is not like a completely permissionless, censorship resistant cypherpunk protocol.

685
00:36:38.096 --> 00:36:39.857
And this is the first time a lot of people learned about that.

686
00:36:39.997 --> 00:36:48.280
So when it comes to a hacker steal some funds and they try to kind of, you know, launder it somewhere, they'll use different protocols for this, right?

687
00:36:48.540 --> 00:36:50.821
One is Tornado Cash, which cannot be turned off.

688
00:36:51.321 --> 00:36:51.481
Right.

689
00:36:51.701 --> 00:36:54.582
Another is ThorChain, as you said, which has operators.

690
00:36:54.942 --> 00:36:58.904
But their stance at ThorChain is basically like permissionless, credibly neutral.

691
00:36:59.264 --> 00:37:01.325
We can't do anything about it.

692
00:37:01.505 --> 00:37:07.227
That's always been confusing to me about ThorChain is like there is an off switch and they're like, we're not messing with the off switch.

693
00:37:07.247 --> 00:37:07.447
Yeah.

694
00:37:07.627 --> 00:37:07.867
Right.

695
00:37:07.927 --> 00:37:12.049
And Taylor Monahan is among those who've called them out and saying, no, you actually do have an off switch.

696
00:37:12.069 --> 00:37:13.169
You could do something about it.

697
00:37:13.429 --> 00:37:25.534
Now, this is near has an automated sort of firewall bouncer at the door that sort of flag these things as stolen funds, transactions and paused it almost automatically.

698
00:37:25.854 --> 00:37:33.097
And so what's the debate in the crypto community as to whether you should have the authority to do this or is it a debate around neutrality?

699
00:37:34.017 --> 00:37:34.498
A little bit.

700
00:37:34.538 --> 00:37:40.285
I think really the reason why this is a bigger debate than it really needs to be is that there's some of the words that Near is using.

701
00:37:40.305 --> 00:37:45.731
Like they're using the words like we are permissionless infrastructure, but we're not neutral.

702
00:37:45.851 --> 00:37:49.195
And somebody is saying, well, then then you're not actually permissionless.

703
00:37:49.215 --> 00:37:50.497
Like, don't use the permissionless word.

704
00:37:51.004 --> 00:37:54.066
Then there's other people who are saying you shouldn't have this ability at all.

705
00:37:54.206 --> 00:38:01.631
And I'm throwing a flag at that of like we have some of the hardcore cypherpunk protocols, the permissionless ones.

706
00:38:01.651 --> 00:38:03.212
We've got that stuff.

707
00:38:03.412 --> 00:38:08.034
Exchange hacks and bridge hacks have lost the most funds in crypto ever.

708
00:38:08.535 --> 00:38:12.097
Like over $8 billion combined on those two things.

709
00:38:12.497 --> 00:38:14.899
So like now we have this cross-range infrastructure that.

710
00:38:15.599 --> 00:38:20.703
Also, the news of as of this morning, got exploited today for $3.8 million.

711
00:38:20.783 --> 00:38:22.905
And the reason why it wasn't worse- Wait, a separate hack.

712
00:38:22.925 --> 00:38:23.825
This is a separate thing.

713
00:38:23.866 --> 00:38:24.546
A separate hack.

714
00:38:24.566 --> 00:38:29.730
This is the near intense application also got exploited for $3.8 million.

715
00:38:30.130 --> 00:38:33.253
The reason why it wasn't worse was this same shield mechanism

716
00:38:33.653 --> 00:38:37.038
detected the transactions and prevented the loss of further funds.

717
00:38:37.398 --> 00:38:45.990
And so all of the people that lost money in this near Intense exploit will also be returned the money because near Intense makes $3.8 million in like a week.

718
00:38:46.171 --> 00:38:47.893
So it's like not really that big of a deal.

719
00:38:48.474 --> 00:38:48.794
And so...

720
00:38:49.515 --> 00:38:54.239
My take is like we have this system that is like discerning between bad and good.

721
00:38:54.879 --> 00:39:02.665
And we've had the previous systems where like, you know, code, not kings, you know, we've had the previous systems already.

722
00:39:03.105 --> 00:39:05.367
And like now this new system is more discerning.

723
00:39:06.187 --> 00:39:07.428
Sure, there is trust.

724
00:39:07.808 --> 00:39:10.830
There is custodianship for a moment in near intense.

725
00:39:11.150 --> 00:39:15.673
These have historically, at least with my vernacular, been bad.

726
00:39:16.234 --> 00:39:20.517
But then also at the same time, you know what else is bad is losing like $9 billion of user funds.

727
00:39:20.577 --> 00:39:24.479
And so like my stance is like, hey, man, like, this is a new strategy.

728
00:39:24.599 --> 00:39:25.460
Let's see it play out.

729
00:39:26.580 --> 00:39:30.642
Yeah, I guess maybe it's a semantics debate over like definitions of words, right?

730
00:39:30.742 --> 00:39:34.183
So there's a person quote tweeting, permissionless doesn't mean neutral.

731
00:39:34.583 --> 00:39:35.204
Yes, it does.

732
00:39:35.784 --> 00:39:42.527
And so calling out Nir for using the words, I guess, permissionless and also, you know, saying we're permissionless but not neutral.

733
00:39:42.847 --> 00:39:46.009
Now, Ilya on the Near team had a response to this.

734
00:39:46.449 --> 00:39:47.810
Cryptospace really has a choice.

735
00:39:47.870 --> 00:39:51.993
Grow the F up or get sidelined with random regulations.

736
00:39:52.073 --> 00:39:54.615
So he's making the point, hey, we're building a product.

737
00:39:55.015 --> 00:39:59.118
We don't want the product to have money laundering capability.

738
00:40:00.098 --> 00:40:04.681
Actually, we have the ability to do this, and therefore it's a good user experience.

739
00:40:04.701 --> 00:40:05.642
We should be doing this.

740
00:40:05.722 --> 00:40:07.463
It's kind of the right thing to do for our users.

741
00:40:07.523 --> 00:40:08.604
It's what everyone wants.

742
00:40:08.624 --> 00:40:09.224
Yeah.

743
00:40:09.464 --> 00:40:13.305
And I guess your point is like, that's a fine experiment to run.

744
00:40:13.745 --> 00:40:20.768
We already have the super credibly neutral infrastructure, the tornado caches, the Ethereum's, the Bitcoins of the world.

745
00:40:21.288 --> 00:40:27.650
And so like why not everything has to be like that, especially when you're a layer up and you're on kind of the intense layer.

746
00:40:28.470 --> 00:40:32.412
Yeah, I think people are also confounding Near with Near Intense.

747
00:40:32.732 --> 00:40:33.552
Near is a blockchain.

748
00:40:34.233 --> 00:40:35.213
It is permissionless.

749
00:40:35.313 --> 00:40:36.474
It is censorship resistant.

750
00:40:36.494 --> 00:40:40.115
It has all of those like same properties that we know and enjoy in crypto.

751
00:40:40.455 --> 00:40:47.538
Near Intense is an application that has no technical dependency, vice versa, with Near the blockchain.

752
00:40:47.959 --> 00:40:55.482
And the Near Intense application is a little bit more trusted, has a little bit more opinions about it, is not fully like cypherpunk.

753
00:40:55.922 --> 00:40:58.464
And that's also true for any bridge whatsoever.

754
00:40:58.604 --> 00:41:00.685
Cross-strain bridges have dependencies in them.

755
00:41:00.725 --> 00:41:02.046
That's just the nature of how they are.

756
00:41:02.747 --> 00:41:06.189
Yeah, I mean, there's another thing that happened this week, which is base.

757
00:41:06.309 --> 00:41:08.411
So Coinbase, they have a protocol.

758
00:41:08.451 --> 00:41:11.012
It's not the ERC-20, but it's a base standard.

759
00:41:11.052 --> 00:41:12.774
So you can run something called the B20.

760
00:41:12.794 --> 00:41:14.795
It's a token protocol standard on base.

761
00:41:15.476 --> 00:41:21.640
And you can also do ERC-20s, but B20 now added a seize function on top of it.

762
00:41:22.200 --> 00:41:32.007
So that the author of the B20 token standard has the ability to actually seize assets if they are stolen in a hack like this.

763
00:41:32.328 --> 00:41:39.713
And this is not the full cypherpunk, cryptopunk version, but it is product market fit for something like equities.

764
00:41:39.733 --> 00:41:44.877
If you're the issue of an equity, North Korea steals your capital, essentially.

765
00:41:44.897 --> 00:41:45.978
Your Apple shares, yeah.

766
00:41:46.018 --> 00:41:46.138
Yeah.

767
00:41:46.238 --> 00:41:50.721
You're not just going to be like, oh, I guess North Korea is on my board now.

768
00:41:50.861 --> 00:41:53.162
I guess they have a seat on governance, right?

769
00:41:53.782 --> 00:41:56.124
Let's send them the Zoom call.

770
00:41:56.324 --> 00:42:02.147
Yeah, you just won't issue your tokenized shares in that format at all.

771
00:42:02.347 --> 00:42:08.091
So we have space for fully cypherpunk, you know, store value assets.

772
00:42:09.011 --> 00:42:09.892
We haven't lost that.

773
00:42:10.313 --> 00:42:14.377
And now we're getting, you know, other product market fit for different use cases.

774
00:42:14.618 --> 00:42:16.119
I mean, I think it all makes sense.

775
00:42:16.160 --> 00:42:17.421
And this is much ado about nothing.

776
00:42:17.942 --> 00:42:18.883
Yeah, totally.

777
00:42:20.084 --> 00:42:23.909
Speaking of near, we also got a near ETF this week out of Bitwise.

778
00:42:24.169 --> 00:42:27.893
So this is ticker NRR, the Bitwise near ETF.

779
00:42:29.895 --> 00:42:40.903
Pretty notable launch if you compare it to Solana, who has some pretty healthy numbers, something like over half a percent of the total near supply flowed into the Bitwise near ETF on day one, which is pretty crazy.

780
00:42:40.943 --> 00:42:42.064
Half a percent of the total supply.

781
00:42:42.925 --> 00:42:52.091
If you look at like the Bitwise narrative as like what near is, because Bitwise educates to the next marginal circle of investors outside of crypto.

782
00:42:52.171 --> 00:42:53.112
Yeah, how are they selling it?

783
00:42:53.953 --> 00:42:55.375
Intersection of crypto and AI.

784
00:42:55.875 --> 00:42:56.276
Okay.

785
00:42:56.536 --> 00:42:59.820
Near Intense, which is a primary near product, is seeing rapid growth.

786
00:43:00.240 --> 00:43:05.766
Near is quantum resistant and private, highly scalable, low inflation with revenue funding buybacks.

787
00:43:06.487 --> 00:43:06.647
So.

788
00:43:07.368 --> 00:43:07.949
All makes sense.

789
00:43:07.989 --> 00:43:10.391
Good time to launch an ETF when you're on the upswing like that.

790
00:43:10.591 --> 00:43:10.832
Yeah.

791
00:43:11.132 --> 00:43:12.674
Let's talk about what's next.

792
00:43:12.754 --> 00:43:17.118
New York says prediction markets are actually illegal gambling.

793
00:43:17.538 --> 00:43:18.199
What's the news there?

794
00:43:18.239 --> 00:43:20.301
Is this going to go to the Supreme Court?

795
00:43:20.441 --> 00:43:22.523
Also, Vitalik with a post on the week.

796
00:43:22.863 --> 00:43:25.185
He says Ethereum isn't a blockchain anymore.

797
00:43:25.365 --> 00:43:27.147
Actually, not just a blockchain.

798
00:43:27.267 --> 00:43:28.068
It's something else.

799
00:43:28.668 --> 00:43:31.151
And it has the words world computer in it.

800
00:43:31.491 --> 00:43:33.092
We'll talk about all that and more.

801
00:43:33.152 --> 00:43:35.715
But before we do, we want to thank the sponsors that made this possible.

802
00:43:36.055 --> 00:43:36.715
Some exciting news.

803
00:43:36.795 --> 00:43:41.537
We are launching a new podcast to help people figure out the crypto cycle, how to navigate it.

804
00:43:41.617 --> 00:43:44.298
The best crypto cycle investor I know, his name is Michael Nato.

805
00:43:44.398 --> 00:43:45.458
He runs the DeFi Report.

806
00:43:45.498 --> 00:43:50.280
This is the guy that sent me a sell alert before the 1010 price drop happened.

807
00:43:50.460 --> 00:43:52.900
His cycle analysis has been absolutely on point.

808
00:43:52.980 --> 00:43:54.321
I've been following him for years.

809
00:43:54.501 --> 00:43:57.922
And this year we started recording weekly podcast episodes.

810
00:43:58.082 --> 00:44:05.844
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.

811
00:44:05.944 --> 00:44:08.344
There's new episodes that are released every Wednesday.

812
00:44:08.404 --> 00:44:09.145
They're 30 minutes.

813
00:44:09.205 --> 00:44:09.665
They're short.

814
00:44:09.705 --> 00:44:10.345
They're punchy.

815
00:44:10.465 --> 00:44:12.846
I think this crypto cycle is harder to navigate than most.

816
00:44:13.086 --> 00:44:14.326
So let's do it together.

817
00:44:14.466 --> 00:44:15.666
Go subscribe to this podcast.

818
00:44:15.726 --> 00:44:18.327
Search The DeFi Report wherever you get your podcasts.

819
00:44:18.387 --> 00:44:21.448
YouTube, Apple, Spotify, or find a link in the show notes.

820
00:44:21.588 --> 00:44:23.148
There's a new episode waiting for you now.

821
00:44:23.388 --> 00:44:32.675
The state of New York has filed a lawsuit against prediction market company Polymarket saying that the platform is operating an unlicensed gambling business in New York.

822
00:44:32.755 --> 00:44:41.663
State officials have asked the judge to stop the company from operating in New York and are also seeking financial penalties and payments to users who took part in the platform.

823
00:44:41.823 --> 00:44:42.823
Also, additionally...

824
00:44:42.844 --> 00:44:43.464
Wait, users too?

825
00:44:43.484 --> 00:44:44.565
Yeah, exactly.

826
00:44:44.885 --> 00:44:45.285
Oh, no.

827
00:44:46.466 --> 00:44:47.566
Got to protect the users, you know?

828
00:44:48.907 --> 00:44:59.211
A U.S. appeals court on Friday ruled against the prediction market operator, Kalshi, saying Ohio and Tennessee can regulate its so-called event contracts under their gambling laws.

829
00:44:59.711 --> 00:45:03.192
So two blows to prediction markets this week.

830
00:45:03.512 --> 00:45:05.453
Poly market getting sued by New York.

831
00:45:06.053 --> 00:45:08.974
Kalshi losing a case against Tennessee and Ohio.

832
00:45:08.994 --> 00:45:09.755
Yeah.

833
00:45:10.715 --> 00:45:21.844
This the outcome of this the current state of there's like a game of risk being played by the prediction markets teamed up with the CFTC versus the states and it's pretty split.

834
00:45:22.625 --> 00:45:25.947
And so there's different like circuits with with the court.

835
00:45:26.888 --> 00:45:32.333
The states have won the Sixth Circuit, that's Ohio and Tennessee, and the Ninth Circuit, that's Nevada.

836
00:45:32.754 --> 00:45:40.020
Kalashie won the Third Circuit with New Jersey, and New Jersey's attorney general already asked the Supreme Court for a review.

837
00:45:40.401 --> 00:45:45.846
And so there are still some circuits to play out, but it seems kind of inevitable that this is heading to the Supreme Court.

838
00:45:46.446 --> 00:45:49.509
David actually, the writer David from Bankless has been writing on this.

839
00:45:49.529 --> 00:45:57.195
So if you want to follow, I think he's actually the person producing the best content about the inevitable conclusion of prediction markets in the Supreme Court.

840
00:45:57.896 --> 00:45:59.537
So you can subscribe to the newsletter.

841
00:45:59.777 --> 00:46:01.899
I mean, it's definitely going to the Supreme Court, right?

842
00:46:01.919 --> 00:46:02.380
Because like-

843
00:46:03.000 --> 00:46:04.761
Well, states want their cut.

844
00:46:04.981 --> 00:46:07.323
They've had their cut on other sports gambling in the past.

845
00:46:07.383 --> 00:46:08.544
And so they're going for their cut.

846
00:46:08.944 --> 00:46:10.865
I guess that's what the judges are ruling.

847
00:46:11.265 --> 00:46:16.689
The CFTC is on, you know, team, these are just markets, any event contract markets.

848
00:46:17.509 --> 00:46:20.751
And so the Supreme Court, I guess, is going to have to decide.

849
00:46:21.312 --> 00:46:25.494
That seems pretty, not existential, but incredibly important.

850
00:46:25.514 --> 00:46:29.417
That ruling will be incredibly important for the future of prediction markets.

851
00:46:29.937 --> 00:46:33.318
And it's sort of a binary type ruling, right?

852
00:46:33.898 --> 00:46:34.118
Yeah.

853
00:46:34.658 --> 00:46:35.818
Yeah.

854
00:46:35.858 --> 00:46:41.620
Meanwhile, Coinbase has received a CFTC approval for Coinbase Clearing LLC.

855
00:46:42.380 --> 00:46:48.161
This is the third of three licenses that one can get out of the CFTC.

856
00:46:48.181 --> 00:46:49.342
And Coinbase now has all of them.

857
00:46:49.362 --> 00:46:54.763
So Coinbase can now be the exchange, the broker, and the clearinghouse for fully collateralized derivatives.

858
00:46:54.783 --> 00:46:55.703
So this is not margin.

859
00:46:55.723 --> 00:46:57.243
This is not perpetuals.

860
00:46:58.064 --> 00:46:59.244
This is prediction markets.

861
00:46:59.924 --> 00:47:04.225
And this is also crypto binaries and fully paid options.

862
00:47:05.005 --> 00:47:09.706
So just getting a little bit more options in the derivative space, which includes prediction markets.

863
00:47:10.126 --> 00:47:16.748
This is what Coinbase needed to do to fully ignore Calci, kind of in the same way Robinhood did previously.

864
00:47:17.428 --> 00:47:21.509
Robinhood first had Calci as its prediction market supplier.

865
00:47:22.029 --> 00:47:26.150
And then Robinhood just gave Calci the boot for its own prediction markets platform.

866
00:47:26.430 --> 00:47:28.390
Coinbase now has the ability to do this as well.

867
00:47:28.430 --> 00:47:35.753
Do you think, do you wonder if like Polymarket and Calci will kind of fight back in the form of launching a crypto exchange?

868
00:47:36.213 --> 00:47:47.418
So if Coinbase and Robinhood are going to come into their territory, then what's to stop Polymarket from, say, becoming more an exchange and kind of, we're seeing this with the AI labs, right?

869
00:47:47.438 --> 00:47:51.559
You know, the frontier labs are all somewhat circling around and launching the same thing.

870
00:47:52.240 --> 00:47:52.440
Mm hmm.

871
00:47:53.383 --> 00:47:54.164
Uh, sure.

872
00:47:54.204 --> 00:47:58.627
I mean, they're going after Coinbase's gargantuan business.

873
00:47:58.827 --> 00:48:13.018
And like Robinhood 2, for example, honestly, that's why I'm kind of a hood bull is because the best thing to have in all of this debate, if everything is going to become the everything finance app, the super finance app, then like you want to buy the one with a distribution, which is kind of why I'm bullish Robinhood.

874
00:48:13.078 --> 00:48:15.560
Cause like Robinhood has all of those things.

875
00:48:16.101 --> 00:48:18.963
And then it also has the 50 million customers or whatever.

876
00:48:18.983 --> 00:48:19.163
Yeah.

877
00:48:19.395 --> 00:48:20.476
Product skills too, right?

878
00:48:20.496 --> 00:48:23.537
They have the ability to stitch it all together in a pleasing user experience.

879
00:48:23.617 --> 00:48:25.218
And that is a cut above.

880
00:48:25.659 --> 00:48:29.801
A delightful user experience, which is ringing in my ears by the end of the Hood Summit.

881
00:48:30.001 --> 00:48:36.465
Well, speaking of a delightful user experience, are you ready for the cryptographic world computer, David?

882
00:48:36.865 --> 00:48:38.006
What the fuck is this segue?

883
00:48:39.502 --> 00:48:42.887
This is, I think the point is like, this is Vitalik.

884
00:48:43.348 --> 00:48:45.591
And he put out a post this week.

885
00:48:46.352 --> 00:48:51.259
And he said that Ethereum is not so much a world computer anymore.

886
00:48:51.920 --> 00:48:54.604
And he's going with a phrase, it's more like a cryptographic thing.

887
00:48:55.025 --> 00:48:55.726
world computer.

888
00:48:55.746 --> 00:49:06.073
And he's basically talking about the original genesis of blockchains back in the 2010s and what they were, what Ethereum really was, and what they're going to be soon.

889
00:49:06.353 --> 00:49:10.796
They're starting to become now what Ethereum is going to be in, say, 2030.

890
00:49:11.336 --> 00:49:21.483
And the big difference is you go from a world where you have to, if you're Bitcoin or early versions of Ethereum, you have to reprocess every single transaction.

891
00:49:21.783 --> 00:49:22.464
That's how you get

892
00:49:24.565 --> 00:49:28.247
to a world where all you have to do is verify it.

893
00:49:28.747 --> 00:49:37.110
He's talking about a world that has been unlocked with ZK proof technology, ZK snarks, ZK starks, that sort of thing.

894
00:49:37.651 --> 00:49:40.112
And he calls this a fundamentally different world.

895
00:49:40.252 --> 00:49:44.774
In fact, I mean, do you even call Ethereum just a blockchain at that point?

896
00:49:44.854 --> 00:49:47.575
Or you're kind of limiting it if you just think about it as a blockchain.

897
00:49:48.035 --> 00:49:54.603
It's really a cryptographic world computer for the verification of whatever you need to verify.

898
00:49:55.004 --> 00:49:58.348
And so a lot of the things can happen somewhere else.

899
00:49:59.109 --> 00:50:02.633
Ethereum is just used for verification purposes.

900
00:50:02.993 --> 00:50:03.834
One poster put it this way,

901
00:50:04.455 --> 00:50:09.121
Ethereum does not have to be fast enough to do everything, only to verify it.

902
00:50:09.702 --> 00:50:15.650
And he said practically, with ZK, the unlock, you know, we're doing some of this today.

903
00:50:15.730 --> 00:50:18.874
Pure Das was a test of this, of course, snark proofs.

904
00:50:19.935 --> 00:50:22.038
Decentralization goes from being sort of a,

905
00:50:22.919 --> 00:50:26.442
a cost that we pay to being at an advantage, right?

906
00:50:26.462 --> 00:50:29.004
Because we can have parallel compute, parallel storage.

907
00:50:29.444 --> 00:50:34.488
It's sort of like the magic of snarks that I think we've previously been very excited about at Bankless.

908
00:50:34.828 --> 00:50:38.691
And what you actually get, the guarantees you get, are guaranteed inclusion.

909
00:50:38.711 --> 00:50:39.852
So this is a fossil.

910
00:50:40.633 --> 00:50:43.896
This is censorship resistance that really can't be tampered with.

911
00:50:44.056 --> 00:50:47.098
And I think Ethereum, once it ships fossil, will be best in class there.

912
00:50:47.839 --> 00:50:51.461
He promises base layer privacy, quantum safety,

913
00:50:52.262 --> 00:50:53.803
Four to eight second latency.

914
00:50:54.043 --> 00:50:57.685
I think you'd like to see that even lower, but at least four to eight seconds.

915
00:50:58.305 --> 00:51:01.827
And then light nodes that verify instead of trust.

916
00:51:01.847 --> 00:51:03.368
You can run everything in the light node.

917
00:51:03.908 --> 00:51:16.935
So it's kind of packaging the entire Ethereum roadmap, but in this term of not just a blockchain going off of paying homage to Ethereum, the world computer, the cryptographic world computer.

918
00:51:17.658 --> 00:51:19.340
I loved your impressions of this.

919
00:51:19.360 --> 00:51:26.747
I'm not even sure if you read this, but I read this and I was simultaneously incredibly bullish and also bearish.

920
00:51:28.468 --> 00:51:36.135
And that's how I kind of feel about Ethereum these days is just like this is the most bullish thing I've ever read, I think,

921
00:51:36.956 --> 00:51:40.537
Or maybe it's like a road to Urbids.

922
00:51:41.017 --> 00:51:46.239
And like, because we're not talking about use cases at all in this post, which always worries me.

923
00:51:46.539 --> 00:51:50.421
Like, I'm always like, you know, that goose meme of like, you know, chasing guy like.

924
00:51:50.941 --> 00:51:52.422
I'm like, world computer for what?

925
00:51:52.762 --> 00:51:53.122
For what?

926
00:51:53.142 --> 00:51:53.262
Right.

927
00:51:53.822 --> 00:51:54.663
What are we building it for?

928
00:51:55.363 --> 00:51:56.524
Just tell me.

929
00:51:57.344 --> 00:52:04.048
And I think the thing we're building it for is store of value for money assets, for censorship resistant store of value.

930
00:52:04.388 --> 00:52:07.070
That would totally make sense to me, but that's not in the post.

931
00:52:07.370 --> 00:52:12.433
We're talking about abstract verification cases that are hard to wrap your arms around.

932
00:52:12.473 --> 00:52:20.838
So Ethereum is just this really interesting project, I think, right now, where it's like, in some ways, it's the most ambitious thing that exists in crypto.

933
00:52:21.659 --> 00:52:26.082
And in other ways, like, we're still, like Vitalik anyways, not the champion.

934
00:52:26.102 --> 00:52:27.723
We're still trying to find how to use it.

935
00:52:28.203 --> 00:52:32.425
Well, Vitalik's not the champion of describing exactly how it's used in the real world.

936
00:52:32.465 --> 00:52:35.367
And so there's a lot of layers that have to happen in between that.

937
00:52:36.748 --> 00:52:37.028
Yeah.

938
00:52:37.488 --> 00:52:37.769
Yeah.

939
00:52:37.949 --> 00:52:41.131
I think our kids are going to find some really cool things to do with Ethereum.

940
00:52:43.357 --> 00:52:56.510
And I kind of think that what I'm saying is like that same thing as what you're saying is like, I do think that this is going to be incredibly useful as we accelerate as a society, as the future is going to be so weird.

941
00:52:56.530 --> 00:52:58.451
This is something I've been saying on this podcast forever.

942
00:52:58.512 --> 00:52:59.773
The future is going to be so weird.

943
00:52:59.833 --> 00:53:01.334
It's going to move so quickly.

944
00:53:02.315 --> 00:53:08.021
If you extrapolate some of the conclusions of the sovereign individual, which is a book we've cited a handful of times, like.

945
00:53:08.641 --> 00:53:13.863
the role of governments just kind of gets nerfed to the power of the internet and technology.

946
00:53:13.883 --> 00:53:14.343
Right.

947
00:53:14.563 --> 00:53:20.285
And in that world, we need some society ordering system like Ethereum.

948
00:53:20.425 --> 00:53:22.526
Some truth machines, some verification machines.

949
00:53:22.566 --> 00:53:29.228
Some global truth machines that exist, that transcend nation states and are even higher and more powerful than nation states.

950
00:53:30.068 --> 00:53:31.909
And I just don't know what to do with that right now.

951
00:53:33.369 --> 00:53:37.651
But like, I think in the future, as a society, we're really, really, really going to need it.

952
00:53:38.571 --> 00:53:45.154
But now it's just like, yo, let's do sub-second blockchains to trade tokenized assets.

953
00:53:45.274 --> 00:53:51.157
I feel like Bankless from inception was sort of built around answering a bit of what to do with that.

954
00:53:51.477 --> 00:53:54.478
And our answer has always been like decentralized finance.

955
00:53:54.718 --> 00:53:56.259
It's been monetary use cases.

956
00:53:56.279 --> 00:53:56.639
Money, finance.

957
00:53:56.679 --> 00:53:57.880
That's the thing we do with it.

958
00:53:58.600 --> 00:54:09.128
Then we were really hopeful on, like, the next layer, which would be, like, decentralized identity and alternative systems that otherwise the government would give you.

959
00:54:09.148 --> 00:54:09.928
Yeah.

960
00:54:09.948 --> 00:54:15.892
And maybe we were too accelerated in our timelines, but it's just, like, it seems further than ever today.

961
00:54:15.972 --> 00:54:18.074
That's the bullish piece, right, of all of this.

962
00:54:18.214 --> 00:54:23.818
It's still, like, an incredibly radical, revolutionary, massive TAM potential thing.

963
00:54:24.198 --> 00:54:26.140
World computer, cryptographic world computer.

964
00:54:26.700 --> 00:54:31.823
And then the bare side of it is like, all right, like connect these to the actual use cases.

965
00:54:31.943 --> 00:54:36.685
And I feel like crypto is very much pivoted into use cases season, right?

966
00:54:36.885 --> 00:54:38.506
Where's the revenue you're throwing off?

967
00:54:38.827 --> 00:54:39.607
Who's using it?

968
00:54:39.947 --> 00:54:41.608
What's actually happening on these systems?

969
00:54:42.008 --> 00:54:44.690
And the biggest use case to me for Ethereum is still...

970
00:54:45.370 --> 00:54:49.413
the Bitcoin style store of value type use case and DeFi associated with that.

971
00:54:50.014 --> 00:54:53.936
And that's not in the world computer, cryptographic world computer.

972
00:54:54.157 --> 00:54:56.078
I mean, that's not the branding of that.

973
00:54:56.158 --> 00:54:57.639
So somebody else is going to have to add that.

974
00:54:58.080 --> 00:55:01.842
Barnaby from ETH Labs added this important kind of pushback.

975
00:55:02.283 --> 00:55:05.926
Agrees that this is incredibly bullish, except for one thing.

976
00:55:06.746 --> 00:55:11.949
needs to make sure that state, the valuable state remains on Ethereum's L1.

977
00:55:12.229 --> 00:55:14.050
It's not just verification, not just settlement.

978
00:55:14.350 --> 00:55:18.972
He says this, I don't want a liquidation resolving on some other server, an Aave server.

979
00:55:19.392 --> 00:55:21.373
That valuable state has to stay on Ethereum.

980
00:55:21.833 --> 00:55:29.117
And I think that is an important piece that previous renditions of the Ethereum roadmap, like the L2 roadmap, have missed.

981
00:55:29.757 --> 00:55:33.260
So hopefully people like ETH Labs can add that layer to it.

982
00:55:33.480 --> 00:55:39.565
Hopefully people like Tom Lee can come in and give a narrative that's not the cryptographic world computer to investors.

983
00:55:40.106 --> 00:55:42.488
And maybe it all comes together into something really beautiful here.

984
00:55:43.048 --> 00:55:43.288
Yeah.

985
00:55:43.929 --> 00:55:44.149
Yeah.

986
00:55:44.289 --> 00:55:47.632
I mean, it's 2026, so we don't need to beat a dead horse, but...

987
00:55:48.012 --> 00:56:00.280
After Vitalik talked about all these amazing Ethereum properties, like quantum resistant, verification on your phone, like verification of your account balance of Ether, the asset on your phone.

988
00:56:01.398 --> 00:56:02.458
And dot, dot, dot.

989
00:56:02.559 --> 00:56:04.599
That's why Ether is the best asset of all time.

990
00:56:04.619 --> 00:56:05.260
Yeah, that would be awesome.

991
00:56:05.560 --> 00:56:07.681
Wouldn't it be great if you had said that?

992
00:56:08.021 --> 00:56:10.242
It feels like it's very sayable.

993
00:56:11.162 --> 00:56:14.203
It's just like, say why it's good for Ether the asset.

994
00:56:14.443 --> 00:56:15.344
Oh, my God.

995
00:56:15.644 --> 00:56:16.184
Oh, my God.

996
00:56:16.404 --> 00:56:16.984
All right.

997
00:56:17.204 --> 00:56:18.945
Last thing to close this out.

998
00:56:19.005 --> 00:56:20.646
This was a tweet I saw circulating.

999
00:56:20.666 --> 00:56:23.227
I saw it in a number of financial publications, actually.

1000
00:56:24.147 --> 00:56:25.528
Yano from BlockWorks.

1001
00:56:26.428 --> 00:56:29.273
Calling out a Financial Times piece.

1002
00:56:29.333 --> 00:56:38.246
This is a chief economist at Apollo saying that AI assistants like Muse, which was released, I believe, in the last week or so.

1003
00:56:38.386 --> 00:56:38.887
Instinct.

1004
00:56:38.987 --> 00:56:40.489
Also, ChatGPT's Dot.

1005
00:56:41.490 --> 00:56:47.214
They could be used to cause a bank run because consumers, they start using these AI agents.

1006
00:56:47.254 --> 00:56:50.516
They say, hey, AI agent, optimize my finances.

1007
00:56:50.776 --> 00:56:58.882
The very first thing an AI agent is going to say after they say cancel your whatever subscriptions that you don't use is, hey, look at your savings.

1008
00:56:59.102 --> 00:57:00.643
You have $5,000 in savings.

1009
00:57:00.883 --> 00:57:02.985
Hey, that $5,000 in your Wells Fargo account?

1010
00:57:03.863 --> 00:57:05.484
Why don't we take that and put that somewhere else?

1011
00:57:05.705 --> 00:57:05.885
Yep.

1012
00:57:06.145 --> 00:57:08.447
Put it in a SoFi app and you can get, you know, 4% or 5%.

1013
00:57:08.487 --> 00:57:10.028
Put it in stable coins.

1014
00:57:10.048 --> 00:57:11.189
You get, you know, 5%.

1015
00:57:11.289 --> 00:57:11.849
Why not do that?

1016
00:57:11.929 --> 00:57:13.771
And then, oh, you want me to do that for you?

1017
00:57:13.851 --> 00:57:14.391
No problem.

1018
00:57:14.451 --> 00:57:14.872
Click here.

1019
00:57:14.972 --> 00:57:15.212
Click.

1020
00:57:15.612 --> 00:57:17.033
And then the AI agent will go do that.

1021
00:57:17.073 --> 00:57:22.998
Well, problem is, David, banks aren't set up that way because they love to extract rent on consumer savings.

1022
00:57:23.018 --> 00:57:26.541
From those who don't want to get 5% on their savings deposits.

1023
00:57:26.601 --> 00:57:31.503
Yeah, it was the big issue that they the flag that they threw with the Clarity Act, the stablecoin yield.

1024
00:57:31.523 --> 00:57:31.723
Right.

1025
00:57:31.783 --> 00:57:37.445
It's just like, oh, no, this will drain all the deposits out of the banks and this will collapse the U.S. lending system.

1026
00:57:37.625 --> 00:57:37.785
Right.

1027
00:57:37.805 --> 00:57:46.709
Well, AI agents may also deliver that in the form of an instinct or a muse or a dot that is working on the user's behalf instead of for the banks.

1028
00:57:47.369 --> 00:57:54.192
So to me, all of this is great news, but maybe the banks will get alarmed and try to try to block these AI agents in Congress.

1029
00:57:55.463 --> 00:58:00.088
I mean, they certainly will because that's their one job is to protect their margins.

1030
00:58:00.168 --> 00:58:01.409
And this is how they get the margins.

1031
00:58:01.670 --> 00:58:10.480
I mean, overall, if this thesis does play out, I'm incredibly bullish on just the world because of all the AI agents that are making like my money more capital efficient.

1032
00:58:10.820 --> 00:58:13.662
Think if they can do this, think about all the other things that they can optimize.

1033
00:58:14.042 --> 00:58:16.284
Like the world's just going to get better a lot faster.

1034
00:58:16.364 --> 00:58:18.605
And part of that is that money is going to leave the banks.

1035
00:58:18.745 --> 00:58:20.967
That's the world's going to be a better place as a result.

1036
00:58:21.327 --> 00:58:21.647
Yeah.

1037
00:58:21.787 --> 00:58:23.708
I mean, I agree with that.

1038
00:58:23.808 --> 00:58:25.529
It's bad for rent extractors, but.

1039
00:58:25.649 --> 00:58:25.870
Yes.

1040
00:58:25.910 --> 00:58:27.190
Good for rent extractors.

1041
00:58:27.270 --> 00:58:27.971
Everybody else.

1042
00:58:28.051 --> 00:58:30.613
But by the way, are you using any of these AI agents that have come out?

1043
00:58:30.653 --> 00:58:31.313
So chat, do you.

1044
00:58:31.313 --> 00:58:33.215
Maybe you just released their dot yesterday.

1045
00:58:33.235 --> 00:58:36.438
I don't know if it's too soon if you've even seen that, but there's Muse.

1046
00:58:36.798 --> 00:58:37.719
There's Instinct.

1047
00:58:38.159 --> 00:58:41.002
It's basically like shrink wrap versions of Open Claw.

1048
00:58:41.342 --> 00:58:42.623
You remember the whole Open Claw thing?

1049
00:58:43.023 --> 00:58:43.203
Right.

1050
00:58:43.384 --> 00:58:43.984
You set it loose.

1051
00:58:44.004 --> 00:58:44.965
You connect it to your stuff.

1052
00:58:45.025 --> 00:58:46.246
I've heard positive things.

1053
00:58:46.747 --> 00:58:48.248
It works for you in the background.

1054
00:58:48.428 --> 00:58:49.889
It wakes you up or whatever.

1055
00:58:49.929 --> 00:58:53.773
Sometimes it'll give you a phone call and it'll just be like, hey, David, you got to get to your meeting.

1056
00:58:54.493 --> 00:58:55.174
You know, you're late.

1057
00:58:55.574 --> 00:58:57.016
Can I get it to check my email for me?

1058
00:58:57.036 --> 00:58:57.136
Yeah.

1059
00:58:57.676 --> 00:58:58.296
A hundred percent.

1060
00:58:58.316 --> 00:58:59.897
I can check my email for the first time in three years.

1061
00:59:00.177 --> 00:59:01.638
That's table stakes for these things.

1062
00:59:02.099 --> 00:59:02.559
Okay, cool.

1063
00:59:02.579 --> 00:59:03.379
Maybe I'll get that.

1064
00:59:03.399 --> 00:59:09.723
I don't know if it's worth the privacy trade-offs for you, but it is interesting and is the next evolution.

1065
00:59:09.743 --> 00:59:10.743
I'll be your guinea pig.

1066
00:59:10.763 --> 00:59:11.223
How about that?

1067
00:59:11.804 --> 00:59:12.184
All right.

1068
00:59:12.284 --> 00:59:13.585
That sounds great to me.

1069
00:59:14.385 --> 00:59:18.227
David could be the guinea pig for the bankless community too, so we'll weigh his experience.

1070
00:59:18.287 --> 00:59:19.328
I'll hook up my Twitter to it.

1071
00:59:19.348 --> 00:59:19.488
Yeah.

1072
00:59:21.053 --> 00:59:23.717
Bankless Nation, that has been it for the first week of October.

1073
00:59:23.737 --> 00:59:25.980
We'll see you back here for the second.

1074
00:59:26.080 --> 00:59:28.924
In the meantime, crypto is risky, but not risky enough.

1075
00:59:29.104 --> 00:59:29.785
This is the frontier.

1076
00:59:29.925 --> 00:59:32.248
It's not for everyone, but we are glad you were with us on the Bankless Journey.

1077
00:59:32.749 --> 00:59:33.110
Thanks a lot.