ROLLUP: One Chart Determines If We're In A Bear Or Bull Market

Ryan:
[0:04] Bankless nation is the second week of september david down timber is continuing

Ryan:
[0:09] i think on the week actually this is more like flat flat timber flat timber.

David:
[0:12] Flat timber yeah down timber is ahead of us

Ryan:
[0:16] Yeah still we've got some more days left in the month i guess things could be this this is why people are wondering is the bull market over i actually saw

Ryan:
[0:23] ansem tweet this over the weekend he was like i'm feeling like it's over why do people.

David:
[0:27] Even bother asking that question

Ryan:
[0:28] I don't know.

David:
[0:29] It's not to say it's not a valid question, but if anyone asks that question, the answer is always dubious. No one knows.

Ryan:
[0:37] Not true. I actually have the answer. I have one chart in this agenda that holds

Ryan:
[0:42] the answer to that question of, is the bull market over? And we'll show you that chart.

David:
[0:46] I don't know what that is. I guess we'll just stumble into it in the middle of the agenda. We're also going to talk about Hyperliquid somehow just getting every stable coin company to fight for its love who gets to be the hyperliquid stablecoin service provider that's been like the theme of the week uh and uh justin sun uh separately also woke up to a pretty nasty surprise of uh getting over 100 million dollars of his wfli tokens just yoinked just frozen uh turns out that can happen uh and we're gonna cover that drama as well the

Ryan:
[1:18] Nasdaq also wants to tokenize equities. What does that mean? And I dug in this week, David, I was looking at the world of real world assets. And I've got some analysis here. Okay. Ethereum is actually doing pretty darn well on that front. And we'll talk about that.

David:
[1:33] I'm just shocked.

Ryan:
[1:34] Also, David, the SEC lost Gary Gensler's text messages from 2022 and 2023.

Ryan:
[1:42] How could that have happened?

David:
[1:44] That's real convenient. I'm going to put on my conspiracy hat when we get to that section of the agenda.

Ryan:
[1:49] I'm just like, give me a little warning. It won't take much. I think that hat will fit pretty nicely in that part of the agenda. David, the markets this week got some good news and some bad news. What do you want first?

David:
[2:00] Uh, bad.

Ryan:
[2:01] You want to do the bad news? Bad news. Yeah, down timber. Get the bad news over with, all right? Yeah, it's down timber. The bad news is unemployment jumped in August 4.3%. This is nearly a four-year high, okay?

David:
[2:15] It jumped to 4.3%.

Ryan:
[2:18] Yes, exactly. Yeah, it didn't jump a whole 4.3%. We'd be having a very different roll-up. That would be like, I don't know what kind of down-tober that would be.

David:
[2:26] Something else would have happened out there.

Ryan:
[2:29] Anyway uh the u.s economy added 22 000 jobs in the month of august let me show you a little chart in case you're not um chart savvy on unemployment is.

David:
[2:39] This the chart

Ryan:
[2:39] This is the chart of unemployment over time this is on the five year yeah.

David:
[2:43] This is not this is not the chart that proves that we are still in the bull market

Ryan:
[2:46] No no no no i.

David:
[2:48] Don't know when that chart comes in the role so i have to

Ryan:
[2:51] Have yeah you're gonna ask every single chart until we get there no you will know it will be quite obvious anyway okay look at this covid spike remember that okay yeah wow that's an aberration right there this is unemployment spike in 2020 jumped all the way up to almost 15 percent okay but then since then after going all the way back down in 2023 it's kind of flat now i guess it's ebbing up a little bit but like i mean look at this chart it's not too much that.

David:
[3:16] Looks flat going from 3.5 to 4.3 over three years i don't

Ryan:
[3:20] Care about that yeah well you haven't been fired David or lost your job. Okay. So that's, uh, uh, you know, some privilege talking, but you know,

Ryan:
[3:27] I guess for 4% is a pretty good historically is maybe the broader point. Okay. So that's the bad news. How about, you know, the good news is right in the agenda. Tell me the good news.

David:
[3:36] The good news is I'm looking for PPI numbers, which I don't know what PPI stands for.

Ryan:
[3:43] It's CPI. It's producer version of CPI.

David:
[3:46] Oh, right, right. Okay. You don't even know what it is.

Ryan:
[3:49] Yeah. Well, whatever. You know what it is.

David:
[3:51] PPI numbers have indicated that the numbers are cooling. The numbers are cooling. They unexpectedly fell by 0.1% in August of 2025. That's the first decline since April. Over a yearly basis, year over year, PPI has risen 2.6%. but that was a, it has come down from being at 3.1% in July. So this is just another way to measure inflation as a different, it's a different.

Ryan:
[4:15] The producer side rather than the consumer side.

David:
[4:17] Yeah. And it fell by 0.1%, which is not a lot, but it's in the right direction.

David:
[4:22] So we feel good about that.

Ryan:
[4:24] All right. But we're all wondering what's going to happen. This is why it was kind of a week where these decisions are at play is because next week by the next rollup, We will know what Fed Chair Jerome Powell is going to do to the Fed funds rate.

David:
[4:38] His September decision- And Polymarket says it already knows. Yeah.

Ryan:
[4:40] Well, you know, it's probability. So it's probabilistic. So the prediction saying it's still at about 86% of a 25 basis point decrease. Everyone thinks it's going to be a decrease. Imagine if he showed up and he's like, I'm going to keep rates flat. Imagine what would happen. We'd have down, down temper for the rest of the month.

David:
[5:00] Yeah, we don't want that.

Ryan:
[5:01] So that's the probability. There's still some probability that it's going down that we might see a 50 basis point decrease. That's at around 12%. So the market's pretty convinced he's going to cut rates no matter. But like be moderate in his cuts, you know, only 25 basis point cut. Yeah.

David:
[5:17] Yeah. But I think the direction is more important than the magnitude of cuts.

Ryan:
[5:23] Yeah, because it's been flat for a long time.

David:
[5:25] Right? So the fact that we are just going down, I think, is a bigger deal than the size of how we are going down. I like it when the Fed goes low.

Ryan:
[5:33] Yeah, you like slow and steady wins the race.

David:
[5:36] Like we said, we have been in a bull market since Bitcoin had its ETF be announced, not even approved.

Ryan:
[5:44] Yeah.

David:
[5:45] And that was a long time ago, dude. That was like two and a half years ago. Yeah. We have been up since then. And I don't want it to go any faster. I just keep going just this current speed, please.

Ryan:
[5:56] We've said some things about Powell on this show, I'm sure. Everybody says things about Powell, right? Yeah. I think I'm going to miss him when he's gone.

David:
[6:03] Dude, I think he's done a pretty good job. It's easy to hate on the Federal Reserve, but everyone was at the end of COVID. It was so inflationary. They waited way too long. Now they're going to crash the economy.

Ryan:
[6:17] I feel like we gave him the hardest time when he was on the transitory inflation path.

David:
[6:21] Totally.

Ryan:
[6:22] And we were like, nah, it's going to be a new normal. I guess he can't say that, right?

David:
[6:26] Yeah.

David:
[6:29] Whatever tightrope that the Fed has had to walk, buy insofar that there is not a recession and jobs are doing fine and inflation is like sticky at three percent but three percent is a totally fine new normal to me like the fed has done a great job to you like i don't know how else you cut it yeah

Ryan:
[6:46] Anyway he's gonna be gone who knows who's gonna replace him it's gonna be a new era um so yeah we'll see what he does it's a big big moment i suppose for for drone powell david the chart you've been waiting for okay this is the chart. Okay.

David:
[6:59] Oh, that is bullish. Wow.

Ryan:
[7:01] I knew you'd see it. I knew I wouldn't have to pre-announce it.

David:
[7:04] All right. There are two things that I need to look at on this chart. The word liquidity at the title, and it's going up and to the right in a very big way. Okay.

Ryan:
[7:14] So for people who can't see this on their screen, this is the chart that to me, the one chart I look at to tell whether the bull market's over or whether we're still going to have a bull market remaining crypto, This is the weekly global liquidity chart. And David, you see the point of direction here.

David:
[7:32] It goes all the way back to January of 2024. So it spans one and three quarters years. So a pretty good amount of time.

Ryan:
[7:40] And this is about, we're at about 185 trillion in global liquidity, and this is all-time high. This is an all-time high number. It is continuing to increase at this point in time. You saw a dip earlier in the year. There was a dip earlier in the year. We also saw a dip in crypto prices, didn't we?

David:
[7:56] Yeah. Here's another chart. So we know that crypto prices lag liquidity. Oh, that's what you're showing here.

Ryan:
[8:01] That's what it is. Yeah. That's what it is. So this is the price of Bitcoin as a proxy for all of crypto and global liquidity. And you can see historically the price of Bitcoin. I don't know. It's in black. It should be in orange. But anyway, global liquidity is in orange in this chart. Price of Bitcoin is in black. You can see there's always kind of a little lag of whatever global liquidity does.

David:
[8:20] It's a little bit of a lag.

Ryan:
[8:22] September lag and then up. Global liquidity chart, man. This is the thing that puts juice and energy into all of crypto markets, and it's still going up. So I think we got some runaway ahead.

David:
[8:36] Yeah. Liquidity to me also is just like, yeah, the denominator is just getting larger, as in the dollar is devaluing. It's almost the same thing.

Ryan:
[8:46] Yeah. I mean, it's not just the dollar. It's all fiat, right? It's like everything. We're printing money. And that's been the story of this asset class.

David:
[8:54] Which counts as liquidity. Does that count as liquidity? Yeah, man.

Ryan:
[8:56] More money, more liquidity out there? Yeah. Yeah.

David:
[8:59] That's what's happening. Yeah. It's like more nominal liquidity, which counts.

Ryan:
[9:05] So get through September, guys, and I think bull market will resume. That's my prediction. Now there's a financial advice, blah, blah, blah, blah, blah.

Ryan:
[9:13] Tell me about Bitcoin price in the week, David.

David:
[9:15] Bitcoin price, it is up on the week. We are coming in at $114,500. That means it is up. How much is it up? It is up 4.5%. 4.5% ETH doing something similar, $4,430, up 3% on the week. Also, the total crypto market cap, Ryan, we're back above 4%. Oh, that feels good. We liked that. We liked that. Yeah, we had a little venture below three.

Ryan:
[9:38] We did.

David:
[9:38] Kind of checked out the weather down there. Didn't really like it. Now we're back above four.

Ryan:
[9:42] Weather feels nice up here. Yeah. ETF launched this week. Actually, it is launching this week.

David:
[9:48] Launching. Okay.

Ryan:
[9:49] We're in the ETF meme coin era.

David:
[9:51] A brand new coin. A brand new coin. One of the oldest and most beloved coins in the crypto industry is getting its first ETF.

Ryan:
[9:58] What is it?

David:
[9:58] What is it? What is it? Everyone place your bets. Lock it in. It's Dogecoin. Dogecoin is getting the ticker sign D-O-J-E from a service provider, an ETF service provider that I'm not really sure who it is.

Ryan:
[10:14] It's not BlackRock. It's not BlackRock. This is Eric Balchunas announcing it and he follows it up and he says this, Pretty sure this is the first ever U.S. ETF to hold something that has no utility on purpose. And I would say, Eric, not the first. Bitcoin was the first, my friend.

David:
[10:35] That's a good point. Well, okay, well then also gold. Gold, yeah. Actually, no, gold has utility because it's in electronics.

Ryan:
[10:43] Yeah, it does.

David:
[10:45] Yeah.

Ryan:
[10:45] But Bitcoin has utility because you can use it to move Bitcoin around.

David:
[10:49] Yes, certainly.

Ryan:
[10:50] Yeah, there's a tiny bit of utility. So yeah, I take that back.

Ryan:
[10:55] Let's take a look at, let's go check in on our crypto treasury stocks, David. David, that's been a running theme for the entire summer, let's say, and now into September. And part of it has been MNAVs are down. Okay, MNAVs are bleeding a little bit. We talked last week about SBET being probably below one from an MNAV perspective, and they are striking back. So this is Sharpling Gaming. They have started a $1.5 billion share buyback. Why are they doing this, David?

David:
[11:25] Because their MNAV is below one, I'm assuming. Like, why else would they be buying back shares? I mean, my big question is like, okay, how are they buying back shares? Where'd they get the money from? Are they selling ETH? Or do they have cash on hand?

Ryan:
[11:39] They're not selling quiche. Quiche. They're not selling quiche either. They're not selling ETH.

David:
[11:44] How do you know? Do we know that?

Ryan:
[11:46] Yeah, they're not selling ETH because they're either doing, I think it's cash that they have already.

David:
[11:51] Probably from minting from their shares. They just already have cash on the downstreet. Yes. They minted shares in the past, which is what they do when

David:
[11:56] MF's above, and now MF's below. I was like, okay, let's just buy back our shares.

Ryan:
[12:00] The book value of your share is at least $1, right? That's the $1 book value of your share. If MNAV equals one, then that's what that means. So if it goes below, then it'd be silly not to buy your own shares.

David:
[12:15] I guess you're just like, if you mint it above MNAV and buying below MNAV, that's just a good trade?

Ryan:
[12:20] Yeah. And what you're doing is you are, if you're buying back your shares, you're getting that off of the supply. and you're increasing the outstanding like kind of shareholder ETH per share.

David:
[12:32] Essentially. You're increasing ETH per share, which is the mandate.

Ryan:
[12:34] Yeah, you're concentrating. So why wouldn't they do this? And that's what they've seen. And so that's what they are doing. I think Joseph Shalom has a quote here. He said, he explained that this is a reaction to SBET trading below its MNAV. He said they believe SBET is significantly undervalued and they're going to do this anytime that it's under one and significantly undervalued. They're just going to buy back their shares.

David:
[12:58] So the sentiment around the whole DAT market, I think, is kind of depressed in this moment because MNAVs are like low. And there's been tweets going around that people like, oh, yeah, these are all Ponzi's. They're unraveling. It's over.

Ryan:
[13:10] I got one, right? This is a back and forth I had with DeFi Ignis. And he was like, hey, DATs make me nervous already. And now we got MNAVs compressing. They're trading below one.

Ryan:
[13:18] I don't feel great about these. There's already Ponzi economics at play. What do you think about this?

David:
[13:23] Not feeling great and feeling nervous is a fantastic thing to feel. in a healthy financial market. And so I'm totally okay with it. I replied to the suite. You had a back and forth with him. I replied to the suite and I said, dude, these things could just totally be cyclical. And if everyone's feeling depressed right now, that's because we were all feeling pretty euphoric a second ago. And we're depressed now and I think we can be euphoric in the future.

Ryan:
[13:49] Your take was the rubber band. It's going to go back and forth.

David:
[13:52] Yeah, we'll just go back and forth, back and forth. All it takes is that, ETH is creeping up. All it takes is to like have a momentum in the whole crypto market over the next two months. And then all of a sudden, MNAV goes back up and we just rinse and repeat this whole cycle. Yeah. Is a possible future.

Ryan:
[14:07] I think that's a good take. I also think like, so this take, you said, we all know these Ponzi's will collapse, but we think it's still early. Calling them Ponzi's is not quite right.

David:
[14:15] That's technically incorrect.

Ryan:
[14:16] Right. Unless you think ETH itself or Bitcoin itself is a Ponzi, which, okay.

David:
[14:21] Which then begins to be unhelpful use of the word Ponzi. Sure.

Ryan:
[14:25] But like when like no Ponzi means it's it's not backed by anything. It's just backed by confidence. And there's actually nothing like underlying here in these dad cases. There is an underlying asset. So at one or below one is definitely not a Ponzi. I think as you coil up and you get higher, yeah, sure. There's some like greater fool theory at work above one, but it's not a Ponzi in the same way that like use of the word Ponzi is not quite right for dads.

David:
[14:54] Yeah.

Ryan:
[14:54] It's my take. I get the vibe though. I get the vibe.

David:
[14:57] Things above 0.1 require greater fools. It requires momentum.

David:
[15:02] It requires a bunch of stuff. But yeah, inherently they are not Ponzis.

Ryan:
[15:06] So Tom Lee actually made a move outside of buying ETH this week. Okay. Actually, he bought some ETH. This raised my eyebrow. Did he buy some ETH? Probably. Last September 11th. Oh, he just bought ETH this morning. That's today. Hey, thanks, Tom. That's another 10, 10. Well, how much did he buy? Kind of a lot. Almost a billion. Let the record stand. Tom Lee is still bullish on ETH.

David:
[15:30] A billion. How come we didn't see that on Twitter?

Ryan:
[15:33] Because he does it every week now. We've come to expect it.

David:
[15:36] I'm going to have of 1.13. That's good. Yeah. It's not bad.

Ryan:
[15:40] Okay. But anyway, he bought something else. What did he buy?

David:
[15:42] He bought a WorldCoin DAT. Yeah. Right? Yeah. Yeah. And there's like $20 million of it.

Ryan:
[15:48] He bought it in BitMine, we should say, in that structure.

David:
[15:51] In BitMine. In BitMine. Yeah. Yeah. Yeah. So like if you own BitMine, then you own like $20 million of this WorldCoin DAT, which then went up like 6,000% and turned into like $600 million. Yeah. Which I would imagine, I would hope he has already sold and converted that into ETH. I kind of thought it was, I raised an eyebrow at this. It's just like, oh, wait a second. You can just buy anything?

Ryan:
[16:14] Yeah, so Tom Lee loves a good photo op. This is Tom Lee and Michael Saylor, you're like buddies. Bitcoin and Ethereum are friends.

David:
[16:22] Which, dude, this photo, man.

Ryan:
[16:27] I actually love this photo. Man, I didn't appreciate it when I saw it in my timeline.

David:
[16:31] There's like so much you could look into and comment on this photo.

Ryan:
[16:35] You know, I think from Michael Saylor, that's a genuine smile.

David:
[16:38] I think that's a genuine smile, yeah.

Ryan:
[16:40] And it's definitely a genuine from Tom Lee. Now, Tom Lee is showing a bit more, I think, affection with the hand over the shoulder. But Michael Saylor's happy to be there. I can tell that.

David:
[16:52] He's very happy to be there. I will say, it is very obvious whose idea it was to take this photo.

Ryan:
[16:58] Anyway, as I say, Tom Lee likes a good photo op. So he was getting photo ops with the Orb. I don't know if you saw that. The WorldCoin Orb. In celebration, I think, of this WorldCoin DAT. It's doing well. You were just like, oh, you know, if you're doing an Ethereum DAT, you should only do ETH.

David:
[17:15] Yeah, kind of. Otherwise, these are just hedge funds.

Ryan:
[17:18] I know, but he's got, look, dude, he's got a lot of ETH. he's got $10 billion worth of ETH and then he's got $20 million worth of WorldCoin. If this becomes a thing, a trend of him doing all sorts of other things, I'd agree with that more. And I understand your spirit, which is you're a purist, right? You just want, give me the ETH expression.

David:
[17:39] It's just like, what's the mandate here? The mandate is to grow the amount of ETH and which he did with that precious. Yeah, he did. But he could have missed, you know? He could have swung and it might've been a miss. Give him a break.

Ryan:
[17:49] He's buying 10 billion ETH, David. Give him a break, okay? It's not just ETH in the DAT story this week. We should also talk about Solana's Michael Saylor, okay? Maybe a photo op with this guy. Solana's Michael Saylor has popped in, and his name is Kyle Samani. Kyle Samani will chair a Solana DAT. This is set to be the biggest one. This is called, what's it called? Yeah. It's with Galaxy Digital, Jump, and of course, Multicoin Capital. And the DAT's name is what? What is this called?

David:
[18:22] I don't know. Unnamed. Unnamed Solana DAT chaired by Kyle Somani.

Ryan:
[18:28] Yeah. Okay. Sudden name. That's why we couldn't find it. This is going to be a big one because there's some cash. In addition to the pipe, the pipe is generally where these investors just, they take the existing soul that they have, they deposit it in kind, right? So big deal. That's not net new buy pressure. They also raised, it looks like, $1.65 billion potentially to buy net new Sol. At least, that's what I think is happening.

David:
[18:53] The notes that I have, it says the pipe raised led by Multicoin Galaxy Jump attracted $1.65 billion.

Ryan:
[18:59] But this says $1.65 billion in cash and stablecoin commitments.

David:
[19:04] Oh my God, wow,

Ryan:
[19:05] Really? So that could be net new buying pressure.

David:
[19:08] That's a lot.

Ryan:
[19:09] Seems like it is.

David:
[19:10] That's a lot. Yeah, that's a lot. Okay, so comparatively, Bitmine initially raised $250 million, and they are just at the starting gun of 1.65. Yeah. I would like a second news source to say that that's $1.65 billion of cash.

Ryan:
[19:26] I don't know. I don't know if the filings are always clear, and you kind of start knowing it after the fact. But a couple of things that are happening. Look at the crypto treasury share of percent supply of the network, and Sol is creeping up above 1% in DATS right now. So ETH is almost caught up fully with Bitcoin, almost above 3% of all ETH supply is in DATS, same as in Bitcoin. Bitcoin's a little higher and Sol's catching up. Also, Sol on the last 30 days, David, up 25%, okay? Whereas ETH is down 1% on the 30 day. So maybe there's a DAT story here.

David:
[20:03] DAT rotation, like first Bitcoin, then Ethereum, then Solana. Okay, that makes sense. I have a bearish take about Kyle Salmani's Solana.

Ryan:
[20:10] Wait, why? You don't think he's going to be the Michael Saylor?

David:
[20:13] So what did Michael Saylor do? He was a net new buyer of Bitcoin and a net new espouser of Bitcoin to a net new audience. Yeah. What did Tom Lee do? He was a net new buyer of ETH and a net new espouser of ETH to a net new TradFi audience. Yeah. Kyle Salmani has already saturated his network of the Solana narrative. He has already been a buyer of Solana and his network is the same. It hasn't changed anything because he's got the dat. So the whole idea is like you need to pass on a torch to a bigger figure. And Kyle Somani has already been that figure.

Ryan:
[20:51] I feel like Kyle Somani is maybe equivalent to Joe Lubin. And the two cancel each other out. Because Joe Lubin has that position in Ethereum. He's kind of always been here, has a bag of ETH. You know, he's going to be supportive. Whereas Tom Lee was like net new buyer. And so Joe is more like Kyle and there is no Michael Saylor yet or there's no Tom Lee yet for Solana. Position is still vacant.

David:
[21:16] I think Kyle actually kind of has an edge over Lubin because Kyle can dress up in a suit and walk amongst Bradfive way better than Joe can.

Ryan:
[21:26] Wait, you think so? Joe is plugged in. He just doesn't...

David:
[21:30] Joe's plugged in, but he's a little too...

Ryan:
[21:33] Kyle is way more bombastic. bombastic so he has that in common with yeah um he.

David:
[21:38] He is product market fit with like the all-in like

Ryan:
[21:43] Zeitgeist oh that's right is he speaking there or has he spoke.

David:
[21:46] At he spoke at the all-in summit about um internet capital markets yeah

Ryan:
[21:49] Which is basically salon yeah so.

David:
[21:51] Like kyle kyle can schmooze with like the all-in types which are it's like a large part

Ryan:
[21:56] Of the financial world kyle's bringing it that's what's happened there um yeah david one area i was looking at this week Like, you know, we've done a lot of episodes on tokenization. We've been talking about the Tempo Stripe blockchain. That's been in the news. And the question is, well, are real world assets on Ethereum under threat, right? This is some of the debates even that we've been having. I decided in preparation for our conversation with Ando to actually look at some numbers behind this. And what I found was ETH is actually doing pretty damn well from a- Dominant? Yeah, from a real world assets perspective. So just a few stats. But stable coins, ETHL1 has 57% of all stable coins. But if you add EVM, so all the change with EVM, that increases to 95%. And before someone goes, wait, stop, you can't do EVM, that doesn't count. I think that Ethereum's network effect is kind of like threefold. So it has the best network effects if the real world assets are on the layer one. That's best for Ethereum, best for ETH.

David:
[22:57] It's not even network effects, it's just the network.

Ryan:
[22:59] Yeah, it's the thing. Better if it, like, well, liquidity is a network effect, you know. Better if it's on Ethereum L2, but still good if it's an EVM. Why still good? Because all the EVMs can become L2s, can become L1s. They're all much more interoperable. you get the tooling. I'm not saying that it's the same level of network effect, but it's still good to be on an EVM. It's much more proximate to Ethereum.

Ryan:
[23:24] 95% on either Ethereum or the EVM. That's stable coins. Treasuries, ETHL1 has 70%. If you add the EVM, it's 86%. Gold, it's crazy dominant. 78% of all tokenized gold is on Ethereum L1. If you add EVM, it's 99%. percent and stocks this is the most nascent so there's only like 500 million dollars worth of tokenized stocks right now uh and ethereum has about let's see if you ignore some of the big ones like algorand which have just like one stock on them and it just seems like it's kind of a beta experiment type play ethereum l1 is 44 and this is where salon is actually doing fairly well at least right now, has 30% in comparison to Ethereum. So anyway, but that's before Robinhood has entered, eToro has entered, and Coinbase has really entered. We know that these are all going to be Ethereum layer twos. And Robinhood alone has like 170 billion in equities that it could tokenize on top of an Ethereum layer two. So if you like zoom out and you take like market share of real world assets,

Ryan:
[24:31] Ethereum's at like in the 70% range right now. for everything on the L1. And then if you add EVM and you say that's also Ethereum network effect, it's 93% of all real-world tokenized assets are actually on Ethereum or the EVM.

Ryan:
[24:47] It's kind of doing well on that score. And it was surprising because I feel like the crypto Twitter, like I was surprised. It felt almost like in areas Ethereum was losing its edge, but it looks like Ethereum is actually gaining some things. Now it's all still early. I get that, but pretty well positioned from a market share perspective right now.

David:
[25:06] Yeah. My take on why you like were surprised or like didn't know that Ethereum had this level of dominance about real world assets is that like no one is really responsible for like beating the drum of Ethereum, Ethereum's dominance in any particular regard.

Ryan:
[25:23] And so like, wait, isn't that us? Doesn't Bayless do that?

David:
[25:26] That's what we're supposed to be doing.

Ryan:
[25:28] So we're not doing our jobs.

David:
[25:30] Well, now we are. Oh, good. But like every leader of a respective chain is going to be like, yo, we are the real world asset chain. And they've got like 3%. But like no one is like doing, because it's open source. The open source doesn't have an inherent voice.

Ryan:
[25:43] Doesn't have a marketing.

David:
[25:44] Doesn't have a marketing arm. Doesn't have a propaganda arm. Ethereum is actually the real world asset chain. And it's not even close.

Ryan:
[25:51] Doing pretty well. And on that, David, Fidelity Stealth launched a money market on Ethereum. The first that Fidelity has launched. They have about $1.4 trillion in money markets, and they launched this on Ethereum L1. It already has over $200 million. That happened in stealth last week. It's just so cool to see fidelity on Etherscan. Look at them. FDIT. Kind of cool.

David:
[26:14] The combination of TradFi financial institutions and Etherscan, I think, is just exactly what we are here for.

Ryan:
[26:20] Yeah, I know.

David:
[26:21] It's like, inspect source. Let me just go pop open the hood of my financial institution without their permission.

Ryan:
[26:27] Well, speaking of that, something that Justin Sun probably regrets is not popping up the hood on the World Liberty Financial tokens that he bought.

Ryan:
[26:37] So we're going to talk about that when we come back. Also, it's been Hyperliquid Week. Everybody's competing, all the stable coins competing for Hyperliquid's love. We're going to talk about all that more. But before we do, we want to thank the sponsors.

David:
[26:49] Justin Sun learns a tough lesson about property rights. The Trump World Liberty Financial Project has frozen all of his tokens that belong to Justin Sun that contained over $100 million in unlocked WFLI.

Ryan:
[27:02] That's just unlocked, by the way, David. If you add the lock to it's like $420 million.

David:
[27:08] Remember when we were talking shit about people who are investing in the WFLI ICO?

Ryan:
[27:13] Must have been you. Not me.

David:
[27:15] Turns out that was an okay thing to do. Financially speaking, it's just purely financially speaking. Okay, so as a result of Justin's son's investments into Word Liberty Financial, he owns 3% of the supply, 3%. And so all investors have 20% of their investment unlocked at launch. Justin said, Justin's son said he would publicly that he wouldn't sell, but then he transferred $9 million of his tokens to HTX. That is an exchange that he owns. Uh, and this got flagged as suspicious for some reason by a variety of different service providers. Uh, the transfers to the exchange were, were, uh, flagged as suspicious. Uh, and, and once they're inside the exchange, it's in a hot wallet, it gets all commingled with other depositors. Justin's son announces that he is encouraging, uh, he's giving out 20% yield for other WLFI depositors. He, I think he's kind of encouraging like a mixing. Everyone just mix up your tokens in my HTX hot wallet.

Ryan:
[28:13] Sure.

David:
[28:14] And then this is what causes the FLI team to freeze the tokens. We don't really know what the justification was for freezing the tokens, because I'm assuming that the unlocked tokens are truly unlocked and the locked tokens are still locked according to the smart contracts. But nonetheless, when their tokens were frozen, the FLI price pumped. It pumped downstream of the tokens being frozen. Wow. Yeah. Not like a crazy amount, but like price stopped going down and started going up instead.

Ryan:
[28:46] The sellers disappeared.

David:
[28:48] Sellers mysteriously disappeared. WFLI tweeted out, we've heard community concerns about recent wallet blacklist transparency. First, WLFI only intervenes to protect users never to silence normal activity. They said 272 wallets were blacklisted over the past few days. They said that this is a very small segment of total holders and was done solely to prevent harm while to investigate and help impacted users. Some were phishing attacks. Others were wallets that reported compromised ownership, et cetera, et cetera. But overall, Justin Sun felt very upset. He denied any sort of allegations of any sort of wrongdoing. If he has liquid tokens, I think he gets to sell them. And he makes a tweet, a plea to the World of Duty financial team in the global community and just says, As an early major investor in WFLI, I have contributed not only capital, but also my trust and support for the future of this project, blah, blah, blah. I call on the team to basically unlock my tokens and let's move forward together. Do we know why his tokens were frozen?

Ryan:
[29:49] I mean, I don't know that World Liberty has commented on his tokens specifically, but they said that the tokens we froze were fishers, were tokens that were compromised, misappropriation, things like that. So I guess maybe they're sort of saying that he was in that bucket.

David:
[30:06] Yeah. I guess when you do commingle your funds with a bunch of other people, you kind of do run that risk. There was another person who stated that their tokens were also frozen and he emailed WFLI compliance and saying, yo, WTF. And then he tweets out, I just got a reply from World WD Financial. TLDR, they stole my money and it's because it's the POTUS, at POTUS family, that's the president of the United States. I can't do anything about it. This is a new age mafia. There's no one to complain to, no one to argue with, no one to sue. It just is. And so they are claiming kind of like racketeering. You can invest in World Liberty Financial, but then when you get your tokens, we freeze them. I don't think anyone truly knows what's going on.

Ryan:
[30:46] Well, okay, we do know one thing that's going on, okay? So one thing that's going on is that the WLFI project is a project that started, according to Trump's, because of DeFi, because they were frozen out of the U.S. banking system, and they didn't want that to happen to other people. and thus we get DeFi. Molly White was one to obviously comment on that irony.

David:
[31:16] On that association? Yeah.

Ryan:
[31:17] Okay. So one thing that is crazy to me, right, is looking at it's a token on Ethereum. How is it getting frozen? It's on Ethereum. Well, the WLFI token specifically includes a blacklist address function, a guardian set blacklist status function that allows them to essentially blacklist tokens. This is not normal. Yeah, most tokens do not.

David:
[31:42] Have this property.

Ryan:
[31:43] No, we don't because we actually want tokens to preserve the property rights of their users. Ethereum, right? So this token had a backdoor in it from day one and that's a design choice. It doesn't have to be like that.

David:
[31:57] It has a debanking button on it.

Ryan:
[31:59] Yeah, we can extinguish your property rights with a function call basically. And so that's what happened to Justin Sun. But there's definitely some irony to it, I think. And one thinks about, what are they trying to build here? World Liberty Finance, they're trying to build a stablecoin, which of course that's going to be blacklisted. I understand that. And then also a DeFi lending and borrowing protocol, okay? And this is their first move? We're going to just start blasting. We're going to start freezing stuff. I don't know where you go from here. I mean, maybe it's a great meme coin, but like, what, like, how DeFi is this? Like, what advantage are we actually getting? So that'd be my critique over it.

David:
[32:42] Just use Aave.

Ryan:
[32:43] Just use Aave. Just use Aave. We're back full circle to actual DeFi. Speaking of that, let's talk about what's going on with Hyperliquid on the week. And they had like a, I don't know, it was like the bachelor for stable coins. Everybody trying to apply.

David:
[32:56] That's a great way to put it. It was the bachelor for stable coins. Okay, so Hyperliquid, just the darling of the last year. Perps Exchange doing more revenue, more volume, making more money than NASDAQ is. Definitely like the number one revenue generator in crypto at this very moment, followed by Ethereum, I think. There is $200 million worth of annualized yield from the amount of stable coins, USDC specifically, that is on Hyperliquid. So there's billions of dollars on Hyperliquid in USDC. and because of that demand for uscc that hyperliquid's product has created circle is getting basically 200 million dollars of profit from the yield of the uscc that's on hyperliquid hyperliquid yep yeah

Ryan:
[33:42] The 200 uh million we should say half of that is split with coinbase right who also has a perps exchange and is kind of a hyperliquid competitor right.

David:
[33:51] So it's

Ryan:
[33:51] 200 million dollars and half goes to your competitor.

David:
[33:54] Yeah so because hyperliquid uses uscc coinbase is making $100 million a year, which I would imagine is just like bad. That's just bad for Hyperliquid versus what could be the alternative. So what's the alternative? The alternative is they host the bachelor for hosting the native stablecoin on the Hyperliquid blockchain. And so they are auctioning off basically a ticker, very valuable ticker, USDH on Hyperliquid. And they are auctioning this off to whoever wants to come and be the external service provider to provide Hyperliquid with a native stablecoin. So it'd be natively minted on Hyperliquid, but really the mechanics of how the stablecoin would work would be up to whoever wins this proposal. It's kind of like when the government just makes a contract in like Northrop Bremen or- It's like an RFP,

Ryan:
[34:45] Right?

David:
[34:45] Yeah, request for, yeah, exactly. Request for whatever. And so a bunch of stablecoin projects all came to bat. Like kind of all of them, actually. Athena was in there. Native Markets was in there. Wait, wait, wait.

Ryan:
[35:00] All of them? Was World Liberty Finance in there? I hope they were, David.

David:
[35:06] Is there Sablecoin live?

Ryan:
[35:08] I think so. What is it?

David:
[35:09] USD1 or whatever? No, that one wasn't in there.

Ryan:
[35:12] They would have to promise to not freeze. Anyway.

David:
[35:15] They would need it for, yeah.

Ryan:
[35:16] So who entered?

David:
[35:17] Who in there? Athena, Sky, formerly MakerDAO, uh frax agora paxos bastion and native markets uh and uh david c from the bankless deep today fantastic job just putting a chart together if you just kind of want to compare and contrast all of the different like properties or strengths weaknesses of all these different proposals and this is what the theme of the week was on crypto twitter it's like everyone was kind of talking about all the different pitches that stablecoin service they did it

Ryan:
[35:45] All out in the open right.

David:
[35:46] It was they did it all out in the open so every single like frax and Athena all of them of just made public proposals to this public auction. And we all as a community kind of all got to put our eyes on it and talk about which one was the best one. And so I'll just kind of quickly run through some of the different competitors. 12 total teams, actually, versus the ones that I said. There's 12 total teams. Paxos offers 95% revenue sharing. So Hyperliquid gets 95% of the revenue of the profit of the supply of stable clients.

Ryan:
[36:16] In buybacks, like they buy hype tokens or something, right?

David:
[36:19] Mm-hmm frax uh proposes cross-chain redeemable stable coin structure 100 of a yield goes back to hyperliquid uh athena labs uh backing usdh entirely by ustb which is basically uh black rock's biddle fund returning 95 of reserve revenue to hyperliquid and pledging at least 75 to 150 million dollars in ecosystem incentives so just like a bribe which is fair game incentive i understand yeah agora sky usds built on the hyperliquid risk framework yield split uh 4.8 return on all usdh held on hyperliquid which is like They're giving most of that yield back to Hyperliquid. So a bunch of different competitors. Polymarket can basically tell you what it thinks. And it's coming in.

Ryan:
[37:07] It's not even close anymore.

David:
[37:09] It's not even close. Native Markets coming in at 94%. Again, I had never really heard of Native Markets. Turns out it's been founded by a pretty good team.

Ryan:
[37:19] They're plugged into the Hyperliquid community, I believe, right? Yeah. Founders.

David:
[37:23] Yeah. The one person I do know is MC Lauder, former COO of Uniswap, Uniswap Labs, who came from BlackRock. So she knows a thing or two. And so Native Mark is just like the big favor to win by 96%.

Ryan:
[37:37] Yeah. So this was like a bidding war. It was just like a public RFP process. So all the proposals and all of the replies almost felt DAO-like in governance forms, right? That's where these proposals were essentially submitted. That's why it was so noisy on crypto Twitter. So much to comment on, so much content, basically. Now, Haseeb, his take was basically the RFP process was a little bit of a farce to begin with. So he had heard, this is venture capitalist rumor mill, I'm sure, but he had heard from sources that perhaps it was always going to go to native markets all along, and Hyperliquid had always intended this. And so issuing a public RFP and having kind of, because the Hyperliquid validators were going to vote on this, was sort of a farce. They already knew who they were going to pick. And by the way, this is how RFP processes work oftentimes in governments and other RFPs.

Ryan:
[38:27] You already know who you kind of want, but you have to issue the RFP anyway. So that was his take. Whether that's true or not, I'm not sure. The final vote, though, is scheduled for September 14th. So we should know next week who's going to win the Bachelor and have USDH as their stable coin.

David:
[38:47] Do you know what else happens on September 14th, Ron?

Ryan:
[38:50] No, I don't.

David:
[38:51] This incoming September 14th specifically is Bankless's fifth birthday.

Ryan:
[38:55] No way. Really? Yeah. When do you celebrate it by? When the LLC was born?

David:
[39:00] When we were given back the approved LLC from the state that we filed it.

Ryan:
[39:06] So many birthdays. Because we started the podcast before that, right?

David:
[39:08] We started the podcast well before that. Yeah.

Ryan:
[39:10] Then we started writing together way before that. So we have multiple birthdays. That's a great day.

David:
[39:15] The legal entity was formed on September 14th,

Ryan:
[39:19] 2020. I kind of regret we didn't launch a stablecoin company, though, rather than a podcast. It's a big business here.

David:
[39:26] Should we have launched a token? We can do that for our birthday.

Ryan:
[39:30] Speaking of stablecoins, though, we should end the section with this. MegaEth introduced a stablecoin on their platform. And this is kind of cool. It's more embedded into the MegaEth chain, right? Does the yield go to validators in some way? Tell me about this.

David:
[39:44] Yeah, okay. So they are trying to figure out a way. So MegaEth, hyperscaled, the most scaled chain that perhaps will ever exist.

Ryan:
[39:52] But they're not made that yet. We should specify.

David:
[39:56] Theoretically, the most hyperscaled chain that will ever exist in theory. Conceptually speaking, they will be the most scalable chain, which means, Ryan, that they can't really take chain fees because the whole concept of a hyperscaled chain, which is like can't pay fees. It has to be, every fee has to be zero.

Ryan:
[40:13] Oh, is everything's going to be free?

David:
[40:14] Basically. Super free. Yeah. Yeah. Super free.

Ryan:
[40:16] So how do you fund this?

David:
[40:17] Exactly. How do you make money as a mega ETH org if you can't sell, if you can't make revenue selling block space? And? One solution that they have is minting enable stable coin and they just collect the yield on the back end of the stable coin. And so they're doing the same thing that Hyperliquid is, which is they are using an external service provider to supply them with a stable coin. And the supply of the stable coin will give them an ongoing supply of revenue that is not block space sales that they get to actually fund their operations with. So it's an alternative way for a blockchain to make money, having a native stable coin and collecting so that yields. So they are working with Athena and they are making USDM. So Athena is the backend service provider. They are going to mint USDM natively on Athena. and that is what allows MegaEth to grow revenue because they get the yield and they have a native stable coin to help grow the supply of on their chain.

Ryan:
[41:12] I like that. So I think that the three business models that we've seen for chains or the way that number goes up basically, right? Is you could sell your block space, either the ordering of that block space or the actual space within the blocks for transaction fees. L2s can do this, L1s can do that. Business model. And there's this model, which is you get a percent of total assets on the chain effectively, right? So they're getting, you know, 4% treasuries. They get 4% of all of the stablecoin assets that they have on MegEath. That's the second. And then there's the OG business model is you just meme yourself into a store of value. You get the special snowflake status, right? That Bitcoin has. And we would say on bankless, Ether is getting and has to some degree. And I think all L1s are in a competition to get that. Those are the three business models for chains. I feel like we've, We're trying them all, aren't we?

David:
[42:05] Coming up next is NASDAQ tokenizing U.S. equities. What does that mean? Are they tokenizing U.S. equities on chain? Or are we trading tokenized U.S. equities on NASDAQ? What's going on over there? And Gensler lost his phone.

Ryan:
[42:17] Oh, no. He lost his phone.

David:
[42:19] How could that happen? I don't know. And what was on his phone? And why did it so coincidentally, conveniently get deleted? And also just two big wins for Optimism and the OP stack. Two new chains. are now OP chains. We're going to talk about them. But first, we're going to talk about another OP stack chain. Ronin, the gaming chain that was the scaling solution towards the Axie Infinity. Okay, so remember, let's go through history really quick, Ryan. Axie Infinity blew up crypto gaming in 2021. So cool. Got like a billion people on chain using Axie Infinity. I may be exaggerating. Maybe exaggerating, but like a lot of people.

Ryan:
[42:55] A lot of people.

David:
[42:56] A lot of people. And then they were like, oh, we need our own chain to scale. And so they built the Ronin chain. uh and that is where things have been so far ronin actually has more activity today like meaningfully more activity today than they had at the height of the axiomania because they have like way more gains now uh and they just have always been an independent layer one they took the permissions off of ronin chain like roughly a year ago maybe nine months ago six months ago something like that uh and now that the chain is like pretty mature they want to come back to ethereum so they're they are coming home so they have chosen the op stack to uh build their chain uh and they are becoming a layer two and so what are they getting what are they getting as an ethereum layer two i actually asked a jiho this when i talked to him recently um one of the big ones is just like the code reuse in ethereum is just so big they love the op stack because so many other chains are using the op stack and so there's just like an ecosystem there yeah exactly they just want the same code that everyone else is using. But they get 15 times faster block times. So they're going for 100 to 200 milliseconds, which is like faster than I thought possible. Throughput of a million transactions per second, inheriting Ethereum security. RON is the token for the RON-in chain. That will remain the gas token. And then they also get $7-ish million in milestone-based grants.

Ryan:
[44:16] Also a bribe.

David:
[44:18] Also a bribe. Also a bribe. Also a bribe.

Ryan:
[44:20] Yeah, yeah. They're not the only one. The second big win for the OP stack was Upbit. So Upbit is a crypto exchange in Korea. Maybe, bankless listener, You have not heard of Upbit. It's actually a pretty big deal. I was looking at the volumes here. They are consistently number four. Look at this. Just like a hair behind Coinbase in 24-hour volume. So Upbit is a pretty large exchange, dominates Korea, as far as I understand. And they have chosen the OP stack, so Ethereum Layer 2, to launch what they're calling GIWA. Is this it? GIWA. So what we know about GIWA is it stands for Global Infrastructure for Web3 Access, one-second block times, and they want to focus mainly on dominating on-chain in South Korea. I kind of think this is the base of South Korea.

David:
[45:10] It's got to be the Coinbase of South Korea, so this is by proxy the base of South Korea.

Ryan:
[45:15] Yeah, and so more chains, more L2s, two big wins for the OP stack on the week, and we are seeing actually BlobSpace get consumed as well. Yeah.

David:
[45:25] And this is before a lot of chains are actually online. So last hard fork, we increased blobs, the blob target from three to six. And slowly that is getting saturated. If you just like deep nerd Ethereum economics, this is kind of what the subject is. So we are up to five blocks a block, every Ethereum block being consumed. So Ethereum blob space consumption is healthy.

Ryan:
[45:47] And of course, Bankless listeners know that L2s use blob space, right? So when this goes up, it signifies that more L2s are using Ethereum effectively. Okay, David, Hood just joined the S&P indice, which is great. Okay, so when you join the S&P 500 indice, you get that nice, sweet, passive bid.

David:
[46:10] Yeah, you're just done.

Ryan:
[46:13] Yeah, you can retire.

David:
[46:14] You win. It's a joy of life. As an equity, you are just very happy.

Ryan:
[46:19] You get some sweet premium, right? Because a whole bunch of people, passive investors, Vanguard group type investors, what do they do? They buy the S&P.

David:
[46:27] They buy persistently.

Ryan:
[46:29] So all of that's going into these 500 companies that have joined these ranks. And now Robinhood is among them. Coinbase, actually, was that earlier this year?

David:
[46:37] That was earlier this year.

Ryan:
[46:38] They joined the S&P. And so this is almost the second crypto company to join the S&P 500.

David:
[46:42] Yeah, Robinhood jumped like something 15% on the news. A bunch of companies were eyeing this one slot because there's a churn in the S&P 500 at a decent click rate. You know who was also eyeing this spot but didn't get it? Who? MicroStrategy.

Ryan:
[47:00] Oh, no. MicroStrategy wanted... Well, okay, that would be... That's always been the goal of... Part of the goal of MicroStrategy, right? Is you can kind of like bid yourself and like win enough that you get into the S&P and then you get that nice sweet passive bid.

David:
[47:14] Yeah. And it's an even bigger deal for MicroStrategy, I think, than it is from Robinhood. Because like Robinhood has to fight to get there and all Michael Saylor has to do is just leverage up on Bitcoin.

Ryan:
[47:25] Huh. Okay. Well, I'm sorry. Robinhood took your slot.

David:
[47:29] I'm sure he'll get it.

Ryan:
[47:31] Do you think he'll get it eventually? I don't know. I would actually like to dig into the criteria by which the S&P kind of... Yeah, I have no idea. It's a committee that decides this, and I wonder what the rationale is.

David:
[47:42] That's a very powerful committee.

Ryan:
[47:43] It's a powerful committee for sure. There are many powerful committees in this

Ryan:
[47:46] world, David, including whoever runs the SEC in that committee. So let's talk about the mysterious case of Gary Gensler's missing text messages. All right. So this was an entire report that actually came out of the SEC. And I'm going to get you to describe it. But I think the summary is nearly a year of Gary Gensler, formature of the SEC, text messages were lost. So this would be the time period of October 2022 to September 2023. They were permanently lost due to a series of avoidable errors within SEC's IT department. There's some description as to how this happened. But notice those dates. October 2022 to September 2023. What was going on during that time?

David:
[48:34] Generally, I would just call that the height of Operation Chokepoint 2.0. Oh, yeah. The height of Gary Gensler's reign over. Like, we still had more to go. Yeah. Like, I don't think we really got out of that until... Actually, wait, no. The Bitcoin ETF was filed right around then and then approved a little bit later. So yeah, I would call that the height of Gary Gensler's terror.

Ryan:
[49:00] That's when he charged Genesis and Gemini. That's when he set a $30 million fine with Kraken for staking, dropped all the Coinbase lawsuits. He was going wild.

David:
[49:11] Dropped the lawsuits as in made the lawsuits happen.

Ryan:
[49:16] And you always hope, okay, new administration comes in and you kind of, that's a check on the previous guys and you get to go through kind of their text messages and their email and you say, what were they up to? I mean, there's a lot of allegations of Gary Gensler being kind of unfair and being just- Gary.

David:
[49:31] Why did you do this?

Ryan:
[49:33] But unfortunately, we can't do that because his text messages have gone. They're gone. They've disappeared.

David:
[49:39] According to avoidable unresolved software errors. Yes. Okay, so 38 of the 1,500 messages have been recovered from colleagues and related logs that were mission-related. So conversations around enforcement actions against crypto reform. Texts from May 2023 show Gary Gensler and his staff discussing when to take action against big crypto trading platforms and their founders. But nothing material, I think, has really been found.

Ryan:
[50:10] This is Hayden Adams. He said, shaking my head, bro, subpoena the text of every founder. in crypto and then deleted his own before leaving office. Yeah.

David:
[50:19] Can I bring something up?

Ryan:
[50:22] Sure.

David:
[50:23] Do you remember when Gary Gensler's, what he did on April Fool's Day, 2023?

Ryan:
[50:29] Was it the Just Deal With It that's burned into my memory banks?

David:
[50:33] He put on the Just Deal With It sunglasses on his profile picture. Can we go to that? So here's Gary Gensler sitting at his chair. And this is on Twitter, his Twitter profile pictures wearing the Just Deal With It glasses. When I saw this, Ryan, I can count on like one hand the number of times I've been mad in like the last decade.

Ryan:
[50:52] Did this piss you off?

David:
[50:53] This pissed me off. This was one of them. Yeah, quite.

Ryan:
[50:55] It just shows how intentional and blatant it is.

David:
[50:57] To me, this is an admission of guilt. This was a very clear admission of guilt.

Ryan:
[51:02] It was kind of like a, and you can't do anything about it.

David:
[51:04] And you can't like, and it's so subtle. It's a dog whistle. It's like, just fucking deal with it, you crypto bros. And like, I can't, I could never take, no one could ever take this to court and be like, he's guilty. Look at this, what he did on April Fool's Day, 2023.

Ryan:
[51:19] But we know, don't we? We knew.

David:
[51:20] No we know he knows what he did was illegal yeah that's the whole point he deleted his text messages he put on the dust and just deal with the

Ryan:
[51:28] Glasses hey we don't know if he deleted it it could be an it accident david like it accidents happen all the time i feel like we can't conclusive accidental.

David:
[51:36] Boat boat accident or whatever yeah

Ryan:
[51:39] Meanwhile in the senate yeah you remember the clarity act so we got the genius bill and the clarity act uh we got the genius bill stable coin done now we have clarity what's a commodity what's a security who gets to decide that passed the House. Remember that? Now it gets kicked back to the Senate for a Senate version of it. So the Senate has not reviewed all the Clarity Act material. They're in the process of doing this. We don't know fully what it's going to look like. But one thing that's kind of cool in the Senate version of the Clarity Act is there is some language explicitly clarifying that non-custodial software developers are not criminal money transmitters under Section 1960. You remember 1960. That's the Roman storm.

David:
[52:22] That's the Roman storm. Yep.

Ryan:
[52:23] Okay. So the clarity act says that's not illegal. And here's some clarity on that right now. So hopefully that makes it to the final revision. There's some other things.

David:
[52:34] Can we retroactively apply that, please?

Ryan:
[52:36] It'd be nice. You'd think it would, I got it. This has got to make it in the court case, right? Guys, the U.S. just passed laws about this, right? It's got to help this court case. Another thing that was great.

David:
[52:48] It is a nice, I'll just remind people that Roman Storm is back home with his daughter in Washington. And he has been. And that's just great.

Ryan:
[52:55] Maybe he's listening to this episode. Maybe he's not thinking about crypto at all.

David:
[53:00] Yeah, hopefully that one.

Ryan:
[53:02] Anyway, also this, validators are exempt from AML, KYC, and anti-fraud requirements. So they specified this. And they also said NFT transactions aren't automatically security. So just in case you were worried about your Pokemon cards, David, they got that. I was.

David:
[53:17] I was worried about those.

Ryan:
[53:18] The NASDAQ thing that you mentioned, let's dig into this because I saw this. NASDAQ is tapping into tokenized equities. The headline here is NASDAQ seeks nod from U.S. SEC to tokenized stocks. Then I also saw the CEO, Adina Friedman, the CEO of NASDAQ at the All In Summit. And here's what she said about this. So this morning we announced that we're going to be bringing tokenization into our markets. So making sure that equities are tokenized and traded on market, in the markets, not in a side a side sleeve, but actually in the core markets. So the eventual goal. It goes on and asks, like, eventually, are you going to have, you know, 24 by 7 exchange? And she says, not yet. It'll take a while. Anyway, they go on. But that was the news. Nasdaq tokenizing.

Ryan:
[54:12] It's providing the option if you want to listen to NASDAQ to either go the tokenization route or the kind of the normal route.

David:
[54:17] It's an either or?

Ryan:
[54:19] Yeah, you could do either or. And these would be native, by the way. So it's like native property rights, right? It's actually like NASDAQ level property rights. So at first glance, that sounds kind of cool, right?

David:
[54:29] Yeah, it sounds like they're just doing the thing that we want them to do. Yes. Is there catchier?

Ryan:
[54:35] I dug into it a little bit more because the headlines were cool. It's all flashy. Unfortunately, it's not as cool as it sounds. So they're still settling on the DTCC, right? Which is the Depository Trust and Clearing Corporation. And so when they mean tokenized, they're talking about tokenizing it on the DTCC's private instantiation of a blockchain. Okay. Do you remember R3 Corda? Do you remember that? Was that like IBM or something?

David:
[55:01] Yeah, I remember this from years ago.

Ryan:
[55:03] They have one of those instances running. The blockchain, not Bitcoin era.

David:
[55:07] It was the institution blockchain that bought an audio codec for some ridiculous amount of money. And everyone was like, why the hell did you do that? That's some trivia.

Ryan:
[55:17] We should do some crypto trivia sometime. That would be good.

David:
[55:20] I actually do have like 50 on, you know, Cahoots is an app called Cahoots or something. Yeah. I have like a 50.

Ryan:
[55:26] Crypto trivia? We should do that as a fundraiser sometime. We just host a whole bunch of people for crypto trivia. Anyway. Okay. So it's just on R3 Corda. So it's an enterprise blockchain. So it's kind of like a little more than a database. This is not permissionless validators in any way. Who the hell cares? No on-chain composability, no public wallets or bridges.

David:
[55:45] I don't even know how to get there.

Ryan:
[55:47] You can't, yeah, I don't know. I don't know either. Anyway, so it sounded cool, but it's not so cool unless they go to the next step.

David:
[55:53] You can't use the tokenization word on a private blockchain. That's not, that's our word. That's not, that's our word.

Ryan:
[55:59] Yeah. They can't use that. It has to be public. Even if you have a corporate L1, it has to be public.

David:
[56:05] It has to be public. Or there's not a token. Exactly.

Ryan:
[56:07] It's our word. They don't know what they're doing. Anyway, last story of the week, David. Give me this. Robinhood, they're doing something?

David:
[56:15] Yeah, this is pretty cool. Robinhood Social. So what's going on right now is a Robinhood summit in Vegas where they announced a bunch of things like Robinhood banking is coming, which I know we're not supposed to like banks, but I would at least like to trade Wells Fargo for Robinhood. I'll take that trade. They introduced a Robinhood social. And so a social app. So you like traders, I think, are really going to be like first class citizens here.

Ryan:
[56:38] What do you mean social? Like Instagram? Like screenshots of my portfolio?

David:
[56:41] I'm imagining it's something like, did you ever go on to FinTwit back in the day? Or I think that still exists.

Ryan:
[56:47] Is this a subreddit?

David:
[56:49] No, it's like a finance version of Twitter, basically. And so you can tweet out your trades and your thoughts about stuff in charts. It's just like Twitter, but with more finance features built in. It's kind of like this. So it's very much like a Twitter feed, but there's embedded tickers, embedded buy sell buttons on tickers, and then you can write stuff. And then you have a profile and your profile can disclose if you're up or down. Interesting. and i i kind of think it's interesting that like this is happening at the same time that base is going social in their own particular way and they're in their consumer crypto way yeah uh robin has just going way more into like the financial end of things whereas coinbase is always trying to be consumer crypto uh but and then we also know that sam altman wants to make a social app as well and so there's like a new generation of social apps coming online and that's kind of cool yeah

Ryan:
[57:39] Do you use any of them is there anything that's kind of now.

David:
[57:42] I use twitter I mean,

Ryan:
[57:44] That's an old social app. Has any social app kind of made it to your daily active user? You know, David Hoffman, are you a daily active user of anything new that's come about in the last like five years?

David:
[57:55] I kind of would like to go the other way. I'd like to get off Twitter, but I can't.

Ryan:
[58:04] Especially this week, huh? Especially this week.

David:
[58:06] We're going to talk about that.

Ryan:
[58:07] Yeah, let's end it here. You guys know none of this has been financial advice. Even that chart that I showed earlier is not actually financial advice, all right? We don't know if downtime is going to lose.

David:
[58:18] I already hit the buy button.

Ryan:
[58:20] Crypto is risky. You can lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.

Music:
[58:34] Music