Airdrop Season is HERE! Biggest Week Yet

Transcript

I think specifically going back to the whole Athena thing people are are like getting their reflexes triggered when they see a stable coin offering 35% apy and they're like oh the last time I saw that was terol Luna and anchor bankless Nation welcome to the bankless weekly rollup where we cover the entire Weekly News and crypto which is always an ambitious Endeavor which is why we are tapping in substitute teacher Anthony cesano while Ryan Shan Adams is stepping out for some downtime some software updates some repairs Anthony how you doing my man I'm doing good always happy to be back as The Substitute Teacher here there's a lot to get through today and I'm I'm I'm pumped basically there is a lot to get through it's actually conveniently a pretty

ethereum focused week this week uh a lot going on inside of the ethereum ecosystem uh there is a debate inside the ethereum community should ethereum should eth change its issue issu in curve so we're talking about monetary policy of E A Very Old subject that is now rearing its head once again uh convenient to have you here Anthony I know that you are following this debate and I think you can you can kind of give us both sides of this I have my opinions I think you have your opinions I think we're going to go back and forth on that also what else is going on this week base season continues to heat up the base chain is hotter than ever it's getting its own layer 3es are layer 3es real I think we're going to talk about that and also some defi Wars between a

and maker Dow things also getting spicy inside of the etherium app layer uh these are all the takes that we're going to get through but before we get into a message from our friends and sponsors over at cryptex Finance which is a defi protocol to make Crypton native markets tradable it's on arbitrum cryptex produces a synthetic asset using chain link and pith data oracles to produce synthetic markets such as TCAP their first ever Market TCAP is the total crypto market cap index if you don't want to think you can just buy TCAP it'll give you exposure to a synthetic exposure to the total crypto market cap all indices are powered by CTX token governance so holders of CTX can vote on upgrades in the management of the

cryptex market and Treasury and they want you to become a part of the Dow to help build the future of decentralized markets there is a link in the show notes Bank list. cc/ cryptex corod uh if you want to play in the world of synthetic Market exposure and other things that the C CTX governance wants to bring to the world first we're going to start with the crypto prices thanks to Kraken for the Bitcoin charts Bitcoin starting the week at $70,300 down 5.5% to 66 $ 65,000 ether doing something pretty similar on the week uh last week we thought we were going to resume up only on the trend but looks like there is still a pause in this bull market uh coming up on almost three weeks of a

pause now uh since the first big um big 20% selloff uh in Bitcoin and ether and all the other Blue Chips Anthony just overall sentiment on where we are in the market right now this is the first big pullback uh and we're trying to get the engine started again haven't really been able ble to do it uh what's your read on the state of the markets yeah so my overall read is basically that we haven't really bought brought in that much new money into crypto I mean besides the BTC ETFs I think that generally there hasn't really been much fresh new money coming in from the retail investors as we kind of like to call them there and I think what's happened now is that obviously some of the flows have slowed down with the ETFs because the ETFs aren't going to be just like a huge flow you know kind of thing

every day happening perpetually it's a slow kind of moving Beast it's passive thing so people are kind of trading around that but typically what you see when Bitcoin reaches you know its old all-time high is that it will kind of go sideways for a little bit like if you look at the previous kind of history of this the last two cycles it stayed there for like a month at least before kind of heading up again so I think everyone is questioning you know is that what we're going to do you know the harving is coming up for Bitcoin in a in a couple of weeks like are we going to continue up after that or are we going to dump like there's you know there's competing kind of I guess narratives going around right now but generally yeah I mean for the last few weeks it's kind of been a

little bit boring there I know that Meme coins have continued popping off and things like that but as I said or as I've mentioned on Twitter for those who follow me there I think that's just a lot of Crypt native money slushing around I don't think that's new people coming in and being like I'm going to go bid this meme coin on base like they don't even know how to do that right so I really doubt that it's that right now so the we hit Bitcoin all-time highs around $773,000 on the 14th of March and the day of recording is the 4th of April so we are approaching uh one month so next week will be one month since the Bitcoin all-time highs uh and this is I feel like generally pretty expected especially when you zoom out and you look at the Bitcoin chart uh the trend

is 100% still intact right so like after hitting the the Bitcoin all-time highs of $73,000 we hit the 61,000 A5 uh lows on the 20th of March uh so just yeah just like a week later uh and and we haven't hit those lows since uh all of the lows that we we've hit um have been slightly higher than that so Trend looking good uh I nothing is broken here uh this is I think very very expected to say that like Bitcoin would be would break alltime highs and then just like rock it and like do its whole like 2x 3x thing I think is pretty um uh pretty greedy I would say uh we we go to we got to hang out for a little bit and I would say the the longer that we can stretch

out this period the better definitely yeah I think that you know if you kind of look at not just the history but look at kind of the vibe and and the sentiment I think people are are looking at the history or like in in large part like I've seen this on on crypto Twitter a lot of people looking at the history man like you know we're just recharging this is usually what happens you know and then we're going to go kind of up only from here uh and then I I kind of pause on that and I'm like yeah okay you know that it is based on history and and there are kind of historical preceden here but then people are like oh is it really going to repeat itself or have we kind of gone up too quickly and now we're going to spend like six months

down here so that's always the tricky thing with with Market kind of commentary is that you're right that the trend is still intact especially the trend on the higher time frames but you know we could go sideways for like 6 months and the trend would still be intact that's that's the thing with sideways movement is that doesn't necessarily break trends for sure for sure honestly I would enjoy six months of flat at at high prices I I could I could play that game uh ether doing something pretty similar start of the week $3,570 down 6.5% down to where it is right now at $3,340 the ratio uh at 05 Z which is relatively low on the long on very long time frames uh Anthony what's your what's your take on the read on on the

ratio it has a lot of just like pessimism price into it right now yeah I mean I think this is a very obvious kind of thing to look at where essentially the market is pricing in that the eth ETFs are going to get denied right like that is the general sentiment right now uh based on everything that I've seen uh and that's why eth is generally relatively weak uh on the USD pairs against like kind of other things as well but also against Bitcoin you know if we were seeing eth BTC go up I think that would be a sign that people are confident that the ETFs are getting improved but right now you know people are just like well why would I you know buy eth when I'm not confident that these things are getting approved no one else is so I'm going to play the kind of

trend of don't buy eth until May 23rd which is where when we're expected to get a decision on a denial or approval then I'll kind of play eth and and the funny thing about that is that I think that if we get to May 23rd and people are still doing this it kind of means that there's no one left to sell at that point and there's no no one left to kind of you know short eth so ironically even if it gets denied on May 23rd we could see eth go up like that's the funny thing about markets okay so you're what you're saying is that it's likely it's possible that many of the people who have who would sell eth on the expectations of an eth ETF denial have already done that because the market has priced in a denial one piece of news that we got

this week one glimmer of hope potentially uh is that the SEC has asked for public comments from Grace bitwise and Fidelity about the spot ethereum ETFs and so previously over the last two weeks people have been bearish about the ethereum ETF getting improved simply because the SEC has just not engaged just like crickets indifference radio Silence from the SEC but this week uh the SEC asked for comments from greats scale bitwise and Fidelity uh specifically about the spot ethereum ETFs Anthony does this change anything is this news like how do you interpret this yeah I mean from what I've seen it's not necessarily news it's just kind of part of the process of what the SEC has to do so I think that it's like illegal for them not to do this so

people were saying that you know this is just part of the process basically so I wouldn't say that it's anything to get too excited about even though you know I really want there to be something to be excited about here because I mean I personally still have hope that these ETFs are getting approved on May 23rd but I totally understand why I I would assume the vast majority of the market just does not have any kind of confidence in this and we've seen you know the Bloomberg ETF expert that we all kind of have been following since the BTC ETFs they've basically lowered their odds to what 20 25% of approval by May 23rd so I think that generally the market is in that kind of range there uh but that can change quickly if we actually do some do see some proper actual back and forth between the SEC

and the issuers you would very quickly expect the market to kind of latch onto that and basically say well look this is what we waited for this is what we wanted to see you know why would they be doing this if they were just going to deny the ETFs right so I think we have to wait a little bit but I I think that on the podcast that you guys did with bitwise they basically mentioned that we have till really the end of April but then if we leave it later than that essentially there's not enough time to do all the paperwork to get them approved anyway so yeah right right right moving into Marcus total crypto market cap 2.7 2.6 trillion dollars in the total crypto market cap uh but let's get into some layer 2 conversations the scaling factor which of course is how

many ethereums worth of capacity all layer twos have uh hit 11 which is an time high this is a tweet from you on warp cast crypto prices may be down but layer 2 activity just hit another all-time high the numbers around layer 2os are just great I think they're great uh we still are below that 39 or that $40 billion in tvl on layer twos but to me it's just like a matter of time um scaling Factor 11.33% Linea coming in at 51 transactions per second over the last week or so that's a 200% increase base is just holding really really steady 30 30 transactions per second second over the last seven days uh Anthony I know I know these numbers make you happy give us your take here what's your sentiment

yeah I mean I I I think since blobs went live on March 13th we've had that kind of economic stimulus injected into the ethereum economy where essentially we brought fees down in such a massive way that it became like a narrative that Hey Okay ethereum can actually scale like people actually saw that we are scaling we know how to scale we're just doing it differently to other blockchains right like there's been this perverse narrative obviously for a while now that ethereum can't scale but we all knew knew that blobs were coming you know anyone paying attention to the ethereum road map uh we just didn't really know how much it would actually scale because it's hard to measure these things on Main net but as soon as it went live we all saw the fees just dramatically drop and since then we've seen base increase

their actual kind of capacity on their side as well by about 100% so they've doubled their gas limit essentially uh on their side so that's decreased fees further we've seen arbitrum do some uh specific upgrades there and the other layer TOS are also working on their own own upgrade so we're really I I would say that we're just on the C of like such a a big kind of scalability error for ethereum now with the Advent of blobs um but yeah as you said like these numbers make me really happy seeing kind of the scaling Factor at alltime high TPS numbers up uh usage up across the board uh and seeing people actually like talk about it as well like that's the main thing I like to look at is that you know I think I said this a while ago on my own show where I said that it's it's

very hard to look at any metric in crypto or any metric in for any blockchains and one compare them to each other but also take much signal from them because they're influenced by a lot of different things but the one metric that I really like and it's a subjective metric but I really like is just Vibes right like The Vibes of an ecosystem gives gives me kind of like I guess like uh a good insight into how strong an ecosystem is and there are bad and Good Vibes obviously not all Vibes are the same but I think the Vibes around layer 2os have dramatically changed over the last you know three weeks since Denon went live because of the fact that people saw that they actually work the fees can be cheap and they can still uh inherit the security of ethereum and do what we've been saying that they can do

for for many years now I I think definitely to to add on to that The Vibes specifically around the base ecosystem are definitely given some Tailwinds I think because of farcaster because the Vibes on farcaster on warp cast are great they're just great like there's no there's no Bots uh there's no toxicity uh there's like hearty healthy debate not like toxic like poo throwing debate uh and Bas and foraster have this like unofficial official relationship where there's just like a lot of activity on farcaster that points to some sort of nft Min on bass or just like discussions on bass and so like B bass and we're going to talk about D gen here in a little bit uh bass just has

this like its own native like local for discussion where the Vibes are like really really good yeah yeah exactly and I mean definitely bass has been the main benefactor of all this new kind of activity and all this new narrative energy over the last I guess like 3 weeks or so um and obviously that's got to do with the fact that coinbase has just been so strong every knows that coin and of their users to as well people kind of playing that so yeah but but I I do want to stress though that even though it like a lot of attention has been focused on bass the other Layer Two ecosystems uh you know a strong and a growing stronger as well like Arbitron 1 has been around for a long time now uh and is still as strong as ever across

many different metrics you know they have a lot of upgrades coming to their um to their chain as well they have a lot of great ecosystems on there so I think that narrative you know short-term narratives kind of stuff uh maybe take with a grain of salt when you see them too and kind of look into other ecosystems as well because yes bass has been uh you know a main benef factor here but yeah the other ones are definitely doing a lot of great stuff as well yeah the whole uh dgen layer three uh thing which we're going to talk about that's actually an arbitrum orbit chain uh which is interesting because it settles to base which is an OP stack uh so we got we got some chains interwoven with other chains uh and this just very very interesting part of the story we

have an entire section to talk about the continuation of bay Summer and the D gen layer 3 uh there's plenty of blob Market stuff to talk about uh and then we're also going to talk about the three airdrops that injected $30 billion into the crypto ecosystem Wormhole Athena and also dgen of course so before we get into all those conversations a moment to talk about some of these fantastic sponsors that make this show possible especially Kraken our preferred exchange for crypto in 2024 if you do not have an on-ramp to get into these trains that we are talking about choose Kraken there is a link in the show notes to get started if you want a crypto trading experience backed by worldclass security and awardwinning support teams then head over to Kraken one of the longest standing and most secure crypto Platforms in the world Kraken is on a

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compliance with tok's guidance you can concentrate on building your company while toku handles the logistics token launches don't have to be complicated talk to toku today to get a free initial token valuation three huge aird drops this week atina releases their Ena token uh coming in at a$ 17 billion market cap uh what is Athena Athena is a synthetic dollar don't call it a stable coin but if you thought of it as a stable coin close enough uh this is one of the more controversial products I think that has come out of the space mainly because of the dependency on centralized exchanges this is the synthetic dollar that is produced by having staked eth on one side and the yield from that going into the value of the usde stable coin uh and

then also shorting perss on centralized exchanges and other exchanges uh on the other side and so this as a result of this basis neutral trade collecting yield on both sides produces a stable coin that token uh is now live uh like I said coming in at $17 billion current current market cap uh $1.6 billion if you bought the token right when it dropped uh it dropped at I think 60 cents is and then it is now at $1.15 uh so already some strong price appreciation like we've seen with every single airdrop uh air drops get dropped and then they tend to like triple in price over the next like you know days to weeks this is just a trend that I'm seeing in the crypto space uh and they have already kicked off their season two

of their air drop so there is more tokens to come uh they are focusing on building Integrations with the mantle Ian layer Pendle maker Morpho and Spark ecosystem uh if this is just 5% of the supply that was distributed at 750 million Ena tokens uh Anthony what's your what's your take here give me give me your thoughts and Reflections yeah so I mean I've been aware of the Athena project for quite a while now should disclose that I am an investor in Athena for for from a while ago um I invested in them because I thought the idea was really interesting at at the time you know this kind of I guess like as you mentioned synthetic dollar that they called it basically tokenizing this kind of uh perp trade that people already do on centralized exchanges and and you kind of mentioned

it you know there are risks associated with this and I think a lot of the debates recently around Athena have focused on these risks you know right now funding is positive because there's a lot of demand for crypto there a lot of demand for uh to buy these assets but what happens when funding goes negative for prolonged periods of time you know do people start uh because people start losing money what happens do they start unwinding their positions and then what happens to the St backing that like does that deeg you know as we've seen before St can trade at a discount to its fair value um we saw this during the terror collapse and then what happens in that environment does it lead to I'm not I struggle to use the term death spiral because I hate that term I think it gets overused but does it lead to a you know

a mass D leveraging event where a lot of people get burnt and hurt and then eventually does that affect the in a protocol you know stuff like that but you know I think that those discussions are great to be having and I I'm glad that people are being very kind of uh I guess like analytical about it rather than I guess ignoring it because we saw what happened with Tera not that Athena is like Tera but I think when you comparing projects in terms of ones that were you know scrutinized by only a few people and then the majority of people were like oh this is going to work you know we got an infinite money printing machine so on and so forth but this time around with Athena you have a lot of people scrutinizing it a lot of people questioning it a lot of saying you know

what these are the risks you know this is how it can get crazy so I'm I'm very happy to see that I'm very happy to see that that's actually a trend now within the SEO system but in terms of the project itself I mean as I mentioned I'm an investor in it because I thought the interesting the idea was interesting um and it's just been crazy to see them drop the token at this valuation like as you said like it seems to be a trend right now with these air drops you not all of them you know there are some out there that haven't really taken off but yeah there are these kind of things that get air dropped you know the market tries to find a price for them and then they have these just h huge fully diluted valuations which may or may not

make sense it's up to the market to kind of choose this but I think that you know a lot of them obviously they haven't distributed tokens to investors yet in investors have vesting team has vesting so I think a lot of people are basically trading these things based on the short to medium-term Hype around it whereas they're not worrying about investor unlocks because they're not for a year plus so they're like you know what can we you know trade this for the next six months so to speak so I think that's what you're seeing with a lot of the air drops um but I'm I'm really glad to see people getting you know all this money from Air jobs because it means that we're basically creating more kind of economic activity on on chain and we're getting more and more people to actually come on chain to claim these things and

to actually use these things and you know there's this whole points program stuff that's been going on over the last few weeks or few months now uh which has kind of spurred a lot of activity too so I think on net they're a good thing like I'm I I don't think they're a bad thing but it's going to be funny When the Music Stops because like as you said most of them are going up right now but eventually when the market kind of exhausts itself you're going to see the reversal of that and I'm ing what that kind of looks like yeah yeah they're going up because there's no sellers everyone is like why why would I sell there's no one to sell like all the all the team is locked up all the investors are locked up uh and so it's like a safe

purchase in the short term um I think hopefully Market participants knowing full well that's it's not necessarily safe in the long term because you know Bitcoin will roll over because it went up too fast because of reflexivity eth will roll over because it went up too fast because of reflexivity and then all of these um investors and teams that are up some bajillion percentages will also be interested in selling uh and this is what a bare Market looks like this is just how Cycles go I think specifically going back to the whole Athena thing people are are like getting their um like their reflexes triggered when they see a stable coin offering 35% apy and they're like oh the last time I saw that was teruna and anchor um even though like the source of this yield is materially different uh I would say this

is a real sustainable yields that are generated by the market price rather where Tara or the anchor ecosystem on terara was like oh we're just going to just mint us and then offer 20% for the depositors out of thin air uh so materially different um Market structure here that's backing this thing not to say that there are no risks but I would just say the risks are different uh and you can't just like kind of like copy and paste the risks of Tera onto the Athena system um Athena currently coming in at $2 billion in tvl $2 billion of eth that's deposited into the system so pretty strong launch so far the product is working also the um a a playing a role in this debate that we're going to talk about later between uh Moro a and maker uh there seems to be uh some

borders going up between the stable the world of the stable coins but we'll talk about that later also that came in uh this week is uh Wormhole and the W token so just one single letter for the token kind of cool uh Wormhole is a cross chain cross layer one Bridge protocol uh has been very very hyped uh they just dropped their token this week uh coming in at a $14 billion fully diluted valuation current market cap $2.5 billion so of the 10 billion total Wormhole tokens 1.8 are currently circulating uh price dropped at $1.3 now went up to $1.45 uh since the recent sell off in the last like 24 hours we were down to $1.16 uh Wormhole uh what do you know

about wormall have you ever used Wormhole Anthony no I mean I don't think so I whenever I bridge I usually use um jumper which is like a bridge aggregator and I don't think I've ever used Wormhole via that I mean I don't do that much bridging especially to other layer ones I don't really do much much bridging what Wormhole is like spec specified for yeah yeah and and obviously like Wormhole is Big player in the salana ecosystem so they're all about you know bridge between ethereum and salana you know so on and so forth um but it's funny looking at the token and looking at what it's valued at versus other bridging protocols like if you go and look at like connect or hot protocol or you know across I think and a bunch of these others they're not valued anywhere near what Wormhole is

valued at um so I it's like when I look at this valuation I'm like okay well you know either the market is wrong on you know the Wormhole side or it's wrong on the kind of connect side and the Hop side and so on and so forth but I don't even know if the market is valuing this thing based on what it is I think it's valuing it based on the hype behind it not on the fact that it's a bridging protocol and that seems to be the trend as well with other protocols like Athena for example I would struggle to think a lot of the people actually even know what they're buying to be honest because atheno is inherently like a a maybe more more complex to understand than other projects because it's something that a lot of people don't really kind of get

exposure to so yeah it's just it's just kind of wild to see these massive valuations on these things and as you said like in the bull market it it can kind of happen because of the fact that there's not really you know there's no sellers there's all these demand and there's all these kind of narratives but in a bare market like that goes the opposite way so I'm very curious to see in like a couple of years if we're in the bare Market what these valuations kind of look like um because yeah there are going to be investors and team that have vested out by then not just for I'm not trying to pick on Wormhole here but like for every one of these that you know who knows what's going to happen like are they going to be selling is that going to be down only is the demand

going to be gone so on and so forth but yeah I mean you just brought up connects and across they're both worth what 2 250 billion fuud valuation compared to not even uh conect is 230 million uh across is 290 million and then Wormhole isli yes yes yeah correct yeah yeah Bill not billion milli yeah yeah yeah yeah so that that's like a huge difference that's like a massive difference like 100x difference basically uh in in valuations here um and even if you just look at market cap not just fully valed value Wormhole market cap is still like 10 times bigger than these other protocols so yeah like it's just crazy may maybe I this is a take from the hip but um because Wormhole is like

a cross layer one Bridge uh it holds state in ways that across does not and and I think also connects does not and so maybe to like advocate for Wormhole here just like holding state is bullish uh just because like it is there's additional like value capture surface area with holding State whereas like a cross is like more of like um a port for U market makers and our Bots to fulfill uh intents uh so across actually doesn't hold any State uh and so maybe maybe there's like a market valuation going on there but I will also say it's a shiny new token uh with zero sellers uh and so that perhaps also why it's commanding such a strong valuation I very much doubt that people are doing that kind of thinking on this

to be honest like that you just kind of outlined like from from all the people well that's the thing like for all the people that I've seen speculating on these things in my community on Twitter and everything they don't mention any of this right it's always like the narrative stuff it's always the hype stuff which is fair enough like I actually think that that's probably the proper way to trade these things uh when I first launch at least because I just said like probably mid curving it and by by kind of analyzing the fundamentals trying to say it's because of State yeah yeah yeah um but I mean longterm maybe but yeah I don't think like short term is Def is focused on that at all really let's get into some blobs because we lost the first blobs uh but this is of course by Design as 14 days approach

blobs 14-day old blobs expire this a pretty cool graphic that uh we saw circulating both on Twitter and on warcast this is blob storage uh and you can see some of the blobs are starting to get uh pruned uh so data is expiring here this is this like deep red color right in the middle of the the screen here um since we are 14 days Beyond uh the introduction of dankun and 4844 blobs are being pruned um just to really set the stage here why do we prune prune blobs Anthony why why does this mechanism even happen mhm yeah so by default all the clients will prune these blobs after I believe it's 18 days um yeah I think it says yeah 18 18 days um just to keep the kind of node

requirements basically steady so if we didn't do this it would be an extra such and such gigabytes every 18 days added to the chain which all the full nodes would have to store and then it would put more of a burden on the network from that perspective so that's why by default all of the clients will prune this now of course uh that means that uh you can actually keep them if you want them as well so for example I'm keeping all the blobs I'm storing them on some hard drives that I have in my um M kind of storage devices there so you're a blob holder hoarder yeah I'm blob blob hoarder definitely yeah yeah um just storing all of people's jpegs for them yeah yeah just as a hobbyist but but the thing is is like there's there's plenty of services doing this as well where

like they're going to be offering this and you know maybe charging for it basically if you want to access this historical data here but yeah we we we expire it we prune it because of the fact that we want to keep node requirements low I mean that's at the heart of I guess ethereum's design is right right keeping those requirements low uh and this was the magic of blobs really and that's why we were able to add them because we knew that they wouldn't be a permanent thing that people would need to store yeah to really drive this point home this is another chart of uh the increased capacity of uh the ethereum layer one with the introduction of blobs uh but also the decreased capacity of the consensus layer and the execution layer so we got three different colors here on this green uh with on on a graph we got

blobs in green which is like the dominant part of this graph and then we have the consensus layer payload and the uh execution layer payload uh just the the size of ethereum consider this the size of ethereum like the how much like overhead or just like state that it has and it's gone up bigly with blobs uh and so like compared to where it was before denune uh like just like this is like really rough napkin math but like three to four times larger as state as just like overhead capacity of the ethereum um blockchain the thing is we prune the the big stuff all of the green gets eventually pruned and so only the permanent parts are the consensus layer and the execution layer which are the uh blue and green parts of your screen here uh which are now as a result you can see

it those parts are actually much smaller since the introduction of blobs uh and so this is just what I consider a good optimization so ethereum both grew in capacity uh which is the green part but also shrunk in long-term State growth so ethereum is both um larger and faster and quicker in the first 18 days until we prune the the blobs but then post 18 days it is uh Slimmer it's leaner it is faster as well in terms of just like total State growth uh I just call this a good optimization definitely yeah and I mean I think like what this chart is illustrating if I'm understanding it correctly here I think I saw this out the day but I didn't dive deeper into it is the fact that instead of using kind of like uh cold data as well or it might

be a different chart like because they um leros or rups using blobs now instead of Co data essentially what happens is that we take load off the network from from that side of things take State growth off from that side of things and yeah as you said it's gone to blobs which do expire so we've yeah we've we've kind of like increased that capacity there here's a tweet from you that I saw on war Caster blobs are now ranked fourth on the eth fee bur leaderboard over the last seven days so we got Unis swap of course coming in number one just always a gargantuan uh burning 3,500 eth in the last uh week eth regular old eth transfer 1700 eth uh moving tether around on main chain 1100 eth and then blobs coming in as 672 eth burned over the last s days and I kind

of expect that to continue to go up only especially as more and more and more uh layer 2s come on to the scenes uh inscriptions also burning a lot of eth people are really paying because they want their jpegs on on the layer one even though they're going to be pruned 18 days later uh where do you think this is going are we approaching an equilibrium is this going up where do you think this is going so I think that a lot of this was due to the inscription stuff um because of the fact that inscriptions were just pushing up the base fee of blob which just pushed up the price of blobs for everyone but I think that what it gives us an insight into is that once we add as you said more layer TOS more rollups once there is kind of more people using blobs like

the price naturally goes up like it does uh on the non kind of blob transactions and that translates through more fees being paid uh and more fees being burned obviously so I think this is going to go down again because like if not for inscriptions it would go it's just going to go down and kind of like reach a kind of plateau there because the rollups are very like I guess um efficient in how they use the blobs in that like they don't want to overpay if they don't have to obviously um and they have different ways of kind of uh measuring this and and and kind of uh uh seeing when the best time to post blobs is and things like that but as the you know as more rollups come online as the uh the Cups have more activity they're going to need

to use more and more blobs which means that while blobs are at what they're at today you know Target a three max of six uh then essentially what happens is that even without inscriptions the rollups will be taking up a lot of capacity and then we'll see the fees go up there but it is worth noting that we're not going to be stuck at three blobs as a Target in a Max of six we're going to keep increasing both the count and the actual size of blobs as well uh over time which is really the magic of blobs is that we get to do that um but yeah I mean over the longer term though I mean I expect the the kind of fees to go up just based on on demand because yeah like the demand will go up on the l2s which will

trickle down into the into the data which is the blobs and then we'll see the kind of prices of blobs go up yeah even in in the last like one or two days we've actually seen some inscription fatigue I'll call it uh the supply of inscriptions going into blob space uh has gone down and so we've actually seen a reduction in Blob fees uh and the reduction in the number of blobs going below the target of three blobs a block uh so we're down to like 2.2 uh 2.3 uh yeah blobs per block uh and so this is kind of like when uh gas fees are under the Target that e559 sets as a result then the gas fees go down so actually in the last like you know 12 18 hours blobs have actually been free uh because people are just

like not posting inscriptions getting inscription fatigue people are bored putting their jpegs onto the chain um and so as a result like layer twos have more uh are basically free once again uh I think people are overall surprised about like how much total space there are uh for layer twos to leverage blobs I kind of consider like inscriptions as like backfilling whatever layer twos don't use because layer twos will outbid inscriptions like any day of the week we uh like a layer two is going to outbid your interest in purchasing blob space to put your jpeg on the Chain uh but like when there're isn't that much demand from layer twos then like people will go ahead and put jpegs in but we've seen a an um just a reduction in overall usage of inscriptions and layer twos aren't totally using all the blob space

do you have any like comments about just like what how how much slack there is in this system and and where this is going yeah I mean it's hard to tell because obviously there aren't there isn't just one lay too right there are many of them and they're all going to have different kind of usage profiles over time and some of them will be used more than others and some of them will be more scalable than others like as I mentioned before Bas increased its capacity by like 100% because they were hitting their capacity on the execution side so I mean there's really two parts to to uh I guess like two high level parts to a roll up here you have the execution side and the data side um the data side is obviously on ethereum L1 with blobs but the execution side is

squarely on the L2 so they need to increase their capacity and then essentially once you reach capacity on on the um on on the data side again because of the execution side we data gets more expensive execution is cheap and then it's like a balancing act between those kind of two sides there um but as I said like there's not just one L2 there's going to be more of them coming online more of them using blobs and that's going to affect everything as well not just these layer twos getting more scalable but also the number of layer twos using blobs here yeah we're only like two weeks into this whole thing but when we get the reduction in cost to Layer Two which is what this tweet that I'm showing on my screen is showing is uh total spend on blob fees over the last like 24 hours I think this

is a daily chart was uh 1.9 million uh so $1.9 million was spent purchasing blobs what it would have cost had blobs not existed to purchase the same amount of call data is $50 million uh and so like you know going down from $50 to $2 million what does that do that opens up more viability for more layer tws and now we're only 14 days into blob so like people haven't like decided to make more layer twos in the last 14 days but this is kind of the idea is as soon as you like do what is a 25x reduction in the cost to you know maintain a layer two is like you're going to get more layer twos uh I think that's kind of like the overall prediction and that is what the whole like rollup Centric road map is is

like let's reduce the cost of be a layer two so that we can get more layer twos let's dive in specifically to uh to the base ecosystem uh because as you said like the big constraint now is not necess neily the size of blobs but it is the uh execution side of layer twos uh last week we talked about base increasing their gas Target basically their block size their throughput by 50% which they did and then they did it again this week uh and so I think we were at 3.75 millas per second last week we are now up to five millas so that's five million gas a second uh which is an interesting way to measure scalability uh this is Jesse pelock saying fees are declining quickly and expected to

expecting them to stabilize lower though this of course may increase Demand with a long-term goal of one giga gas which is 400 times more so Jesse and the base team are targeting a 400x increase in capacity on the base layer two and then they said they will be sharing how they are getting there in the weeks ahead uh maybe that happens on a bankless podcast when we schedule one with with Jesse um so yeah this is this is exactly what you're saying here like base is trying to get real big real FAS MH mhm yeah yeah they definitely are and I think that uh as they get bigger here you're going to see them hit the data constraints again or at least like they're going to be bidding like really big for these blobs because they're going to be posting so much data to to

kind of like uh L1 here but also at the same time on this chart that that Jesse has posted the reason why I really like this chart is because it shows you the concept of like basically induced demand um if you look at the the longer term one so this chart in particular is only the short-term one but it still shows you kind of what the effect is so um before this uh spike in the blue line uh earlier in this chart there's another spike in that blue line and the yellow line is the fees so the yellow line will go down every time this spikes but the thing is it went down last time and then started going up again because there was that demand that was latent and then they came in once fees dropped again uh and essentially what it becomes is

basically a cat and mouse game of okay we increased the capacity and then all these new people coming all these new users coming in because they're like oh my God there's more capacity for us Cas coming too yeah exactly exact and then once you see that uh you'll see the kind of fee spiking up again and then you're like okay we have to increase the gas again because of this so and essentially like it it for the foreseeable future while we grow out the whole crypto ecosystem this is not going to be a thing where it's like uh you know a spike and that's it like based on an event uh it's going to be a constant thing it's like a constant demand for Block space um because of the fact that we're not even anywhere close to the you know cap I guess like the um the

adoption that we want to be at when it comes to crypto uh but yeah that's why I like that chart is it basically shows you that there is a lot of demand already waiting and as soon as you as soon as you scale up a little bit that comes flooding in and then you're back to square one so you have to keep scaling up and I think the base team definitely understands that that's why they've set such an ambitious goal but with that goal there's a lot of work involved in getting there it's not just as simple as what they've done over the last week of increasing the gas limit they have to do a lot of optimizations to make sure that they can actually run the software that allows for that to happen so what I'm showing on the screen is uh a dune graph of the median ler two

fees in Orange the median layer one fees in blue and so of course that gap between these these two uh charts these two colors on the chart is the profitability of a layer two and then the Gray Line piercing through the middle is the total transactions over the the course of time which I think is um 24 hours uh base uh cleared 7,000 transactions inside of one minute so over a 100 transactions a second apparently arbitrum is also doing the same 100 Trans transactions per second is that is that high is that low like other chains uh Anthony are boasting like 20,000 transactions per second like how how do we make sense of these numbers yeah so the TPS metric is not one that can really be translated across chains um there are different ways that

different chains will kind of meter TPS and there'll be different ways that the chains handle transactions so I don't think that we should be kind of maybe comparing These Chains to each other in terms of kind of TPS just because they're different especially chains that are not evm like if you're comparing an evm chain to like the svm on salana for example it's not going to be a onetoone comparison they have a different architecture so I don't think it's Apples to Apples I think that when people are comparing these things they shouldn't compare that but at the same time um you know when it comes to TPS there's also a concept of like the weight of a transaction right like what are the actual transactions happening here because if if all you've got is like spammy transactions that are basically doing nothing and it's just

people spamming because their fees are so cheap then to me that's not really kind of like weighty transactions where it doesn't really add much value to the ecosystem whereas if you have like um you know transactions that aren't just doing that that are actually kind of real activity on the network then that adds more value in my mind so it it I think that people can disagree with that view but I don't know like the way I I I kind of view it is that I want to see like high quality valuable transactions happening on these networks uh even though it's a permissionless network and people can do whatever they want on them uh I have no issue with that but at the same time I would rather these networks be useful to people rather than just being a playground for for spam essentially mhm other things that are

going on on the base chain unisat passed a billion dollars in 24 hour volume on base I think that's the first time that a billion dollars has been crossed on a layer two I wonder Anthony if we're going to see a flipping of Unis swap layer 2 volumes versus Unis swap layer one volumes this cycle the trajectory is definitely pointing us there but really the biggest thing that's been going on on the Bas Bas ecosystem at least from a attention standpoint is this whole D gen chain so this is coming out of The Syndicate Twitter account today we're excited to announce the launch of dgen chain a layer three for the DJ token Community built with arbitrum with an arbitrum orbit on base using base for settlement and then arbitrum any trust for da so really just like ah super Juiced chain so like arbitrum technology

of course absolutely fantastic settling on base which is super cheap using offchain data availability which is of course super cheap and then the native token for this layer 3 is dgen uh and so I don't think a lot of people know this which I think actually kind of explains the crazy crazy D gen price action but when you put your ether on base and you bridge it over to the DG Bridge it sells your ether for dgen and then gives you dgen on the dgen layer three uh of which is like kind of more or less a a casino like almost by by Design uh so there's a bunch of meme coins on there people are speculating being DG is L called degens uh and so this has kind of like created a a question inside of the ethereum

community and just with the broader crypto Community are layer 3es real uh this is actually not the only layer three that's going on there I think there's like three or four of them I think most of them are settling on base because everyone realizes that like imagine having coinbase as your top of funnel for your chain well that's what base is uh and so you know really dgen is actually just a layer two but your layer one is base uh and like the ethereum layer one is actually kind of just like irrelevant from the perspective of the DG chain at least that's kind of like the way I think about it Anthony what's your take of like all of these layer three D chain yeah I mean I think a lot of the debate like as you mentioned is centered around what's the point of a layer three

basically because there are very strong opinions from the top L2 teams on these things so I think it's obvious that arbitrum is in favor of them considering that they built the arbitrum orbit infrastructure in order to allow this to happen um but then you have you know I've seen some of the polygon guys saying you know we don't really see the value in layer 3es like we kind of you know see layer 3es as this thing that that doesn't even it shouldn't even exist you know we can just do it at Layer Two and then there are other people with similar opinions but look I I haven't got like a strong opinion either way at this point I think for me this just represents more experimentation happening within the ethereum ecosystem and it really represents like the I guess like the modular thesis right because as you

mentioned you know this chain is built using arbitrum orbit but it's settling down to Bas which is buil built on op stack but it's using any trust da which is arbitrum Da solution here uh for data availability instead of settling that down so there is a lot of experimentation Happening Here with with po it in mind um and I actually think it makes perfect sense for something like dgen to be doing a layer three to be utilizing this because they get they get their own chain which basically becomes their own Casino essentially they get to have users on there that really are just wanting to do dgen stuff essentially like so it's not a shared environment it's more of like a our specific environment and yes it may be like super centralized but I think when it comes to layer 3es and it comes to these kind of

our specific things point it's kind of it's kind of the point they don't really need to be you know too decentralized or anything like that so I think that if that's your kind of environment that you want to create and people are happy with that and people want to kind of bridge into that then you know who are we to say otherwise essentially but I think some of the arguments definitely kind of double clicked on the fact that we could just do this with an L2 instead of an L3 you know just do L2 with da off chain if you want to keep the cost low and then we you know and then instead of an L3 but that's more of maybe a deep architecture question and more of something of like how easy is it to do that because I think it was very easy

for DJ to spin this up like it happened within like few days from what I saw and then they were able to get people bridging in straight away and apparently there's better bridging kind of infrastructure coming as well so yeah I mean my general take is that I'm all for the experimentation like I love that it's happening because whether people find it valuable or not we're not going to know until we actually kind of do this experimentation uh in in a live environment yeah kind of the crazy thing uh about this whole D thing is some of the stats that have been painted over since the the launch of base chain uh 2 million transactions over 57 million dollars bridged uh 24,000 active addresses uh .1 second average block times uh these numbers are actually starting to rival some of the layer ones

out there that uh are commanding like multi-billion dollar like chain valuations uh and now this is happening as as a layer three I did an an episode with will Pepper and yasik from the dgen uh who created the dgen token uh just to kind of like Peak into their heads about what's going on here a lot of why the answer to like why they say why do we do a layer three uh instead of a layer two is just like well of course Bas has all the users like I said coinbase is your top of funnel so just like tapping into that but also they get to have a lot of opinions about how to build an ecosystem so they get to be much more opinionated than optimism or arbitrum or Bass could because they're kind of building something closer to an app like they

have a very narrow specific direction for what they want base chain to be uh and so they get to become much more opinionated about how to build that thing uh and really especially as a layer when like rather than having the ethereum layer one as your settlement layer and therefore like settlement costs like imagine settling onto the cheapness of Base which we just saw like has increased their capacity by 50% twice over the last two weeks uh you have no constraints in scalability like transactions are like billionths of a penny and so like that's that's a free transaction uh and they with Act without any sort of like constraint on like block size or anything like and so this is a hyp specialized chain to do a hypers specialized thing which is to be a DJ casino by Design mhm exactly and

it's kind of funny because it reminds me a lot of like I guess the cosmos thesis right where there were like you know AB specific chains and I think that I've been you know I've been talking about this for a while but basically like the ethereum L2 L3 kind of modular ecosystem seems to be realizing that but it's realizing it in I think a more scalable and better way than I I think Cosmos was originally architected where essentially they wanted to have everyone be their own kind of you know super Sovereign chain bootstrap their own security and nodes and things like that whereas with a layer two and a layer three you don't need to do that you can just reuse ethereums essentially um and kind of inherit that there so a lot of the uh the monolithic people out there are seeing like the ethereum people like

tweet and like dance around about their layer 3es and they're just like uh layer 3es like yeah you guys haven't even fixed layer twos your layer twos aren't even decentralized yet uh meanwhile vitalic butterin comes in with a tweet on a warcaster saying reupping my post from 1.5 years ago on layer 3es uh and so he uh wrote a an article on on his website saying what kind of layer 3es make sense uh and so if you didn't know that this article existed he wrote this in late 2022 uh he says he's now updated it especially with the modern um context that we have today uh and so definitely go read that there is a link in the show notes to get uh to get access to that article there's some drama Anthony that I want you to help me unpack as we progress further in this episode there

is a big debate about the eth issuance curve so we are now talking about the issuance curve of ether there are some decisions to be made uh and some controversy that has been had uh around changes to the E isurance curve there's also lrts flipping lsts and there's just a a new equilibrium uh between the liquid reaking tokens and normal liquid staking tokens there's also drama between maker and a in the defi lending app layer lots of drama this week uh so we're going to get to all these subjects and more but first a moment to talk about some of these fantastic sponsors that make this shows possible mantle formerly known as bit Dow is the first Dow Le web 3 ecosystem all built on top of Mantle's first core product the mantle Network a brand new

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ecosystem check out mantle at mantle. XYZ and follow them on Twitter at zerx manle cell is the mobile first evm compatible carbon negative blockchain built for the real world driving real world use cases like mobile payments and mobile Defi and with Opera Mini pay as one of the fastest growing web 3 wallets cello is seeing a meteoric rise with over 300 million transactions and 1.5 million monthly active addresses and now cello is looking to come home to ethereum as a layer two optimism polygon matter labs and arbitrum have all thrown their hats in the ring for the cell layer 2 to build upon their Stacks why the competition the cell layer 2 will bring huge advantages like a decentralized sequencer offchain data availability secured by ethereum validators and one block finality what

does that all mean for you with cello layer 2 gas fees will stay low and you can even pay for gas natively using erc20 tokens sending crypto to phone numbers across wallets using social connect but cell is a community governed protocol this means that cell needs you to weigh in and make your voice heard join the conversation in the cell forums follow cell on Twitter and visit c.org to shape the future of ethereum all right let's go into one of the bigger debates that I've seen in the ethereum ecosystem and this is a debate over the ethereum protocol which uh we have these every now and then this is um a particularly Lively one and I would call a very very important one uh there was a recent proposal from Casper and ongar to ethereum uh EF cevs about uh the the proposing the need to change the

issuance curve of eth so we are now talking about the monetary policy of eth which is always a very delicate subject Mike Neer uh he releas uh releases blog post very comprehensive uh blog post uh decently technical at least just trying to really uh get very concrete and detail oriented about some of the debates here uh it's just titled issuance issues uh and then he has a tldr issuance on ethereum defines how ethereum pays for security entering mid 2024 the realities of staking have changed seismically since the Inception of the beacon chain at the end of 2020 the future remains uncertain but we can explore the impact of issuance on solo staking e the asset and protocols building in and around ethereum consensus overall uh changing like I

said changing the eth issuance curve is a touchy subject because we are talking about the monetary policy the last thing that I think anyone in the ethereum ecosystem wants wants any sort of resemblance to the Federal Reserve but this is kind of the pattern that is being invoked here uh meanwhile there are some very good arguments about like hey we still have a pretty blunt issuance curve we never really put all that much rigor into uh how and why the issuance curve is what it is and so let's revisit that conversation and gener a more precise issuance curve uh Anthony like what what are your Reflections on this debate how would you characterize the the two sides yeah I would say this debate really stirred up the hive but as you said like it is the nature of any debate

around ethereum's monetary policy it's always going to be a subject of intense scrutiny and as it should be the bar for changing ethereum's monetary policy should be one of the highest bars if not the highest bar in uh changing anything about ethereum in in in kind of like my mind TR but I think that the reason that uh I wouldn't say like the conversation got too toxic or anything like that but the reason why it got so heated I would say is because I think there was a bit of a misunderstanding about a few things here so firstly I'll say that the proposals put forward were just that they were proposals there were no eips or anything attached to them there were essentially research posts from the kind of researchers a few of them as you mentioned some of their names there and they wanted to get feedback on what they

wrote they wanted to start a discussion on this there was no they certainly started one yes they certainly achieved that go but there were no VIPs attached to this now I think the reason why people got ahead of themselves on this was because in the research post they said that they wanted to Target this uh to go into the next ethereum Network upgrade which is called Petra or or Electra which is slated for you could be could happen at the end of this year but probably early next year and everyone was like no it's way too soon we can't be changing the eum monetary policy that that soon now I agree like it was probably a mistake to put that wording in there um because that's what people focused on which means that they didn't actually Focus on the actual proposal itself Because the actual proposal

itself is in my mind pretty sound with its analysis of the risks and concerns but I think that the implementation details are probably the thing that I would disagree with most so I think the two top concerns are that one you know we're concerned with too much stake going into know coming online just generally and too much of that going into like these liquid staking protocols or these liquid reaking protocols and not going to solo stakers which essentially would squeeze solo stakers out of the network and essentially you know get rid of solo stakers that's like the main kind of risk here but the second risk is that in I guess like a downstream of the first risk is that eth as an asset gets replaced as money by an LST like st e could replace eth or some other LST could replace eth as a money

and the researchers are worried about the implications of this so in terms of like analyzing the risks and and and kind of like seeing the the risks and and uh identifying them they did a really great job in doing that but I think where it kind of broke down was trying to get this or at least it's suggesting that they could get this into the next ethereum Network upgrade which is obviously not going to happen um I don't think um but also probably not making their case well enough not doing a good enough sales pitch I think and I think they've tried to rectify that they've gone on you know they went on The Uncommon Core podcast to try and rectify that you know Mike put out this post that that came later than the original proposal um but but yeah and I think that a lot of the I guess risks

have assumptions tied to them as well that people kind of disagreed with whether they were're like you know we disagree with the assumption that 80% of eth is going to be staked for example 90% of e is going to be staged for such and such reason and that is a fair thing to disagree with but then the researchers will say well if if our assumptions are correct and we get to 80% e staked on the network then putting this fix in if you want to call it a fix is too late at that point it doesn't actually fix anything and we can't can't Rectify this so it's a bigger disturbance the more eth is Stak exactly exactly um for for the reasons outlin in the posts and I mean this is a very broad topic but I think that kind of summarizes it I mean as much as I can

summarize such a an in-depth topic there um but yeah as I said at the top like it no matter what the proposal is no matter the details of it anything that ever touches the ethereum monetary policy needs to undergo you know the the highest scrutiny and needs to go through the most intense process to make it into the network because you know I mean for so many different reasons but it really should be the toughest thing to change I believe yeah I think I think that was a great summary really I'm I'll I'll segregate the issues here into two camps there's like the EIP process which people are throwing a flag in saying hey you guys are being too aggressive you guys are um the you're violating the process we need to we need as a community need to process these

proposals and so there's that side of the debate which I think is where most of the contention is about just like hey let's respect the process let's slow this thing down and then there's a pro proposal itself which is like hey let's change the eth issuance curve uh which I think is less contentious but still needs like to be processed um I would say like personally I'm on the Pro lets change the issuance curve side of things um really this debate falls on the side of like are we okay with 100% of eth being staked uh because I think there are pretty strong arguments to say if we approach 50% of eth being staked of which we're at like 26 27 28% right now if we approach 50% uh the difference between 50% and 100% is actually not

that much I think once we pass 50% we will more or less Zoom pretty pretty steadily up to 100% like not super fast but like we'll get there it's almost inevitable and so like this is one of the the reasons why ongar and Casper have presented some urgency about making informed choices about this is they are saying hey if we do get to that point imposing a change will be harder and have more stronger consequences uh and so let's consider this with haste uh which is where like some of the process concerns came about um so like totally understanding the process concerns we want to respect respect the process can't force anything in in I would say like there are there are being there are

two curves being proposed here if you're looking on the screen uh it's the same curve that we have but with less total issuance uh and so if we have less total issuance with a 100% e Stak and then the second curve is kind of like an S curve and so this is what is called uh stake targeting uh and so we can actually Target a specific number and no matter the external incentives around eaking the the LST LRT incentives the igen layer incentives it will band around a particular Point uh call it 25 million eth or we could do 30 35 20 some sort of point and uh if you go too far away from that point issuance will actually drop to zero uh if there is so much external demand from Igan Lair uh and this what

this would do if we targeted 25 million e staked or some 25% uh what this would do this this would actually preserve the value of vanilla eth uh which I actually think is pretty important uh and so this is a difference of like do we want only lsts only rocket pool eth only Lio state eth only ether e eth that's the only versions of eth that you'll see inside of the ethereum ecosystem or do we want to preserve vanilla ether as a first class citizen um and that that's actually kind of where where my position is I don't know if you have landed on a position or a side of this debate Anthony about like where what we should do with the with the issuance curve but if you have I'd love to hear it no I I would say that I'm neutral still right

now uh I haven't made my mind up yet for a number of different reasons um but I I I think that I do want to go back to what you originally said about the fact that what we have right now is a rather kind of simple I'm not I struggled to call it dumb but like simple issuance curve right like as you said like there wasn't that much kind of effort put into it because of the fact that like it was part of the wider proof of stake upgrade and it wasn't something that we were looking at too closely and obviously with the Advent of all these lsts and reaking you know things have changed substantially here but I will say that even back then when the pro of stake was being designed there was still chatter around potentially capping the amount of e staked on the network and the original

form of this was basically capping the active validator set so how this would work is that there would only be X number of active validators on the network at a time so you would still have like say you had 60 million e Stak but the only 30 million of that e Stak would be active at any given time so during the year maybe only for six months of the year 30 million eth would be active and the other 30 million e wouldn't be active right but the rewards would still kind of be um be the same for everyone but that's I guess like similar concept to what's being proposed now we're essentially just lowering the kind of reward curve uh you know to a point where essentially it it kind of preserves as you mentioned like eth the asset so it doesn't get supplanted by

the lsts and essentially makes it so that not too much eth gets staked uh because we actually don't need that much like I think people don't understand that there is a big diminishing return to eth being staked because the node operators as they exist today right they are basically going to be the same for you know a while basically they don't change that often there are a lot of node operators on the network but essentially uh if you if you're adding more e steak to these node operators You could argue that it doesn't really add much more security right like we already have so much Economic Security Stak TI we already have tens of billions of dollars worth of e e Stak tier so like how much more are we getting by staking more eth and then the argument can be made well if we're not really getting

much from it then what are we doing just overpaying for security essentially and this was the original argument around ethereum's um monetary policy which is actually minimum viable issuance so it's essentially this notion that we should only be issuing enough eth to that is viable to secure the network anything more than that is overpaying for security and that is I think at the heart of what these researchers are arguing is that like uh you know outside of all the other risk that they've identified we are pretty much overpaying for security in a world where you know 50% eth State let alone 100% of eth state so I get the arguments on that side but I also get the arguments on the other side of we shouldn't be messing with the monetary policy at this stage like that's that's the that's really the against side I think is that they feel

like that touching the issuance curve or touching the monetary policy at this point in ethereum's life is not great for a number of different reasons one of the major ones being the fact that eth is undergoing institutional adoption right now and it it you know poses a risk to that uh but there are other arguments as well so there are good arguments on both sides and that's why I'm I'm rather neutral here because I want to see this play out um but I definitely think that this is not going to go into the next ethereum upgrade I believe there's a 0% chance of that happening but I'm excited to see more discussions happen over the next you know maybe 12 months or so yeah of all types of conversations about the ethereum protocol I think ether the monetary policy is like one of the more

interesting ones and it's also one of the most um broad ones where I think a lot more people can get involved I had no like contributions to add to the conversations around 4844 I was just like a net receiver of information I actually feel like somewhat equipped to actually like help move this convers ation forward here and I think a large part of the ethereum community also feels that way uh which is why we're seeing so much contention come from so many different corners of ethereum with this conversation MH exactly some LRT and LST Dynamics Lio has now the highest eth staking outflows out of any protocol while ethery and Renzo two of the leading LRT projects liquid reaking token have the highest inflows also something I noticed uh Because of You

Anthony uh was that ethery uh the number one LRT by eth deposits actually flipped rocket pool so we have an LRT that is now bigger than an LST so really some changing Dynamics as a result of the igen layer ecosystem actually kind of one of the points that Casper and Anar were were saying is like there are new influences around the staking and monetary dynamics of eth and we're actually seeing it play out relatively early uh in the Igan lay process like reminder IG lay is not even live yet uh and we have lrts actually like trumping lsts give me your your thoughts and Reflections here I mean if you've been paying any attention over the last few months this should be obvious to you

that people are definitely aping into reaking I think it's just become such a huge thing especially given that there is this kind of I guess like yield Burger you can have or points Burger essentially where you you know by putting your e into yeah yeah I'll explain what I mean by this by putting your eth into ethery you could Farm ethery points you know before they did the token I think they're doing another air drop as well and then they put that eat into IG layer and you're farming igen layer points so you're basically like getting a a points burger like of all these kind of ingredients in there well you're also getting all of the future AVS tokens and so like caller you're getting the the meat and the patties uh and and the and the buns but like all the avss are like the lettuce

the Tomato the condiments if you will yep yep so you're just basically following the kind of incentives here and Lio right now is not an LRT by kind of like uh ly in LRT which means that it's not equivalent to something like an ethery but you can take your St and put into IG layer but there are caps on that whereas you know ethery and others got around the Caps by essentially solo staking that eth as part of IG layer and spinning up IG pods which got around the Caps that Igan layer put in um so there was a lot of inflow going there but it is very interesting to see the fact that uh people are not only going into eify but other protocols as well instead of Lio you can see there's there's uh I mean not on this screenshot but if you

go to Hobby's uh dashboard where he tracks all of this you can see the actual kind of inflows over the past week past month past six months and you can see where they're flowing into it's not just um the lit protocols like mantle for example is doing the thing where you bridge your eth into mantle the L2 and then they actually stake that eth and you can see they're over the past six months they're number three in terms of inflows L is number two but the thing is is that they're number two and by a very small kind of margin sorry but they're losing they're losing EXA it's going away from Li yes because you can see ethery is number one and then you count all the other ones and put them all together ligher is a very small percentage of the total flow going into

staking right now so yeah it's not just you know the L protocols but it's also more and more competition has come online now within the staking space and it's really I think like chipped away at Lio because of the fact that Lio has such a large market share that really like if if there's all these other protocols offering incentives no one's going into Lio and then all the St e holders are like why am I buing this when I could be getting all these kind of incentives over here yes it may be more risky but people are taking on that risk there so that's why I think you've seen this play out and I remember I said this ages ago uh on on Twitter and on my podcast the best way to kind of take L's market share down was for they to be more competition and I think with the

Advent of reaking that competition has just blown up completely yeah that's totally right and you're actually seeing Lio Dro below 30% of total market share uh which it has not been that low in a very long time I remember for a while during like the a the cycle of of ethereum in which everyone was like screaming about like Lio being 32.9% like really approaching that 33.3% uh and everyone's like ripping their hair off like Li's going to cross the 33% barrier uh we are now down to 29.7% uh and that trend is seemingly going going to continue yep and I think as well just to remind people that puffa one of the other LT protocols has over a billion dollars worth of St that they're about

to vampire from Lio which is going to knock another I think like at least percentage point off of Lido's market share just from that uh which is crazy because they're actually going to be withdrawing the E from Lio using the st8 that they have and then staking it again as part of puffer system which is the very definition of a vampire attack here so I uh I I I I I know that Li is probably going to do their own native reaking thing eventually but I'm going to be curious to see if that actually stops the bleeding or if they keep bleeding Market Shar to these other protocols yeah and this is kind of the story of I think this new bull market is a lot of very hungry new players are arriving to build somewhat similar but also novel products to entrenched incumbents we're about to get into Moro

versus a uh and they a are able to move faster they don't have like uh they don't have baggage uh they are able to play in the arena that is more modern and so like all of these what we're looking at here is this chart of LRT the total supply of lrts which which are approaching 2.4 million in eth uh this bright green excuse me cyan color is Puff eth that's all of the Lio Stak eth so so this this cyan bar here is all lto Stak e which is going to be uh pulled out of the beacon chain and the Stak eth will go away and it will turn into puff eth uh and so these are all the result of like modern day igen layer based uh meta uh that are nipping away like we're just seeing rocket pool fall behind the

the leading LRT uh and now we're seeing like Lio start to get really tripped away here uh and this is before the puffy vampire attack as you said so uh this this is kind of like the a big theme of this ball Market is that newer hungrier uh disruptors are coming for uh incumbents exactly exactly and I think that um it's it's kind of funny to see the incentives play out because lighter already has a token that's been trading for a long time they can't really do another airdrop whereas these other protocols have new tokens right that have just come out or haven't done their token yet and they have these points programs so as I was mentioning before that's just the incentives right that's just the incentive of people coming along and being like I'm going to farm

these protocols I'm going to get these points which are going to turn into tokens eventually and then obviously at the heart of all of that it's the mother of all tokens which is IG layer which is the thing that everyone is is farming through all of these protocols that you know people think is going to be like the biggest air drop ever or or whatever um but that's that's the incentive basically yeah it's pretty crazy to see The Ether f token uh price a fully diluted valuation of 5.2 billion uh which in comparison to Lio Lio is at 2.6 billion uh which like if you're just comparing the amount of Ethan Lio versus the amount of Ethan ethery Lido is like super dominant but they're commanding half of a market cap a fully diluted market cap versus ether fi and which probably just goes back to the same

thing that we were talking about earlier with the with the Athena and the Wormhole tokens shiny new token zero sellers everyone's locked up uh and so like true PR Discovery hasn't been seen But like we've got we've got at least one full cycle before true price Discovery actually kind of like happens in these things so right now uh they have a lot of collateral a lot of Leverage to work with that like Lio shot at shot last cycle because it's just like a last cycle kind of project yep yep and this is I guess a trend with crypto generally is that like the newer protocols yes they're newer but they have the fact that they haven't done a token yet as like a huge thing that they can lean on where the older protocols can't and that's how market share is kind of distributed but if you were to

take like a very long-term look here um I do still believe that the protocols that of the best products of the ones that are going to win out over the long term because token incentives can only get you so far but at the same time as you said during a cycle those token incentives can get you far that's for sure right right for sure for sure all right coming up with one of the last subjects of the day there has been a bunch of drama in the defi app player of of ethereum there has been um a brewing War a brewing division between a and maker uh and it's especially with the introduction of both Moro and ethena uh and so here's Mark Zeller who's one of the the leading like call it operators of a the a DA uh writing a proposal to remove the collateral status of D in a

citing risk concerns due to what maker da is doing integrating the new uh eth uh usde from Athena brand new synthetic dollar using that as what a thinks is too much collateral to back a die presenting a systemic risk in die the stable coin and so as a result a is reducing its exposure to die inside of a by just removing it as collateral um stonnie from a uh he comes into the a governance Forum saying personally I am in full favor of offboarding die from all a markets completely at this point I see little value for the a DA with this new risk Direction maker Dow is adopting would suggest a temp check for full offboarding uh the offboarding process

should start immediately in case of a favorable outcome um maybe in the background of this is the incentive of like well a has the gho the go stable coin and so a would like to enshrine its stable coin above competitor stable coins uh but then also at the same time uh there is is this like brand new introduction of eth or usde from Athena into a collateral of maker Dow uh with a pretty uh healthy credit line I think $600 million with a proposal to increase it to a billion dollar on this brand new synthetic dollar which is like you know still getting uh tested still the risks are still being stress tested so makerd giving a very healthy credit line to this brand new stable coin to which a is saying like that's

risky don't do that um so this is the drama of the week in the last week in the in the defi layer Anthony what's your take here I mean I would say that I totally get A's point you know the Ava's Point here about the risk associated with this and kind of make A's New Direction of taking on more risk you know I think for a long time people assumed that maker was this kind of slow moving Beast it was the least risky kind of protocol within defi it would basically do you know a proper analysis before integrating anything but then recently as you just explained they had this proposal maybe not even a proposal they just wanted to do this thing but they essentially put like 600 million to a billion dollars into Athena which I mean is like objectively a very new protocol and an untested protocol and

there's a lot of like real risks associated with it um people and then a is like well this is just crazy like that just increases the risk too much for D which basically means that we shouldn't have it as a collateral asset on a because that could hurt the a ecosystem so I totally get where where they're coming from there um and you know I I I I don't know kind of like what side I I sit on here I don't think it's something that I've paid that much attention to enough to have a side but I think that I I get the logic surrounding it here but I mean you've got a hzu tweet here about Athena's risks being over exaggerated maybe you want to want to get into that one as well yeah this is this is hzu saying uh kind of like

what we were saying is like the risks of Athena are OV exaggerated at least to like what people understand when they make comparisons to um Tera Luna that's what I'm saying hzo says hzu says it's not a Widowmaker trade like gbtc and BTC let alone teral Luna it's very common and relatively lowrisk trade many firms employ even more so if you can use a prime broker like copper fire blocks pretending otherwise is either uninformed or disingenuous current rates will obviously come down as the funding rates shift then usde will become less attractive so starting to happen finally this a maker war is destructive for both parties uh the involved parties seem to go to prioritize ego over value creation um I actually am doing a podcast with Sam mcferson from Sparks which is like the um the a fork for the maker da

ecosystem so basically maker da uh and Mark Zeller from from a and so we're gonna have both of them on a podcast tomorrow morning uh that'll come out sometime uh sometime next week MH yeah and and that should be like a good podcast I think to get the different perspectives there but I mean I I I I agree with with hzu there probably is a little bit of like subjectivity in this and a little bit of ego in this like there always is when it comes to to to these sorts of things um but as I said like I understand uh ARA's position here I understand Maker's position of wanting to increase their revenue their net revenue of the maker ecosystem wanting to increase the supply of Dy as well generally and uh yeah I mean I I'm looking forward to listening to that podcast that you that you do there

should be an interesting one all right coming up as the last bit of the week this is a little bit late since it's April 4th and not April 1st uh this is going to be our meme of the week uh I think it's kind of cringe to do a meme in April 1st on the April 4th but we're doing it anyways because I thought it was pretty funny at the time uh sad this is me tweeting out sad to announce my time at bankless HQ has come to a close but the bankless mission still burns my heart in pursuit of that mission I'm stepping into a VP of decentralization at the salana foundation stoked to work with Anatolia and Austin federa on Salon this was our April Fool's joke says what I think is a very funny April Fool's joke every single year uh and then as a

result of this my DMs are just flooded with people saying David congratulations on the new move like always knew you were salana Maxi really soaked to see what's going on here and then there's like the uh the satisfaction I get of saying like guys come on April Fool's joke April Fool's joke uh why everyone hates April fools like at least kind of for me it's become so like annoying especially because I'm in Australia so I get to experience it twice a year which is super annoying since I'm like in the future so to speak um but yeah it's kind of funny like when I went on Twitter on April 1st I was scrolling through and I got like caught in so many of them where I was like oh my God like this can't be true and then

I'm like a [ __ ] it's April well technically it was April 2nd for me so that's why it didn't immediately kind of ring to me um but it's funny that you got so many DMS about this because I'm sorry you take one you take one look at this and you actually read what you posted and you can see that it's a joke I mean look at the quote for me at the bottom like the quote that you put in there like saying that you know I always knew I always knew David pissed like pissing off eth Maxis it's like what so I don't know people just read the headline I guess and wanted to be nice about it but it's always funny seeing those responses I I think it's just one good day a year to just inoculate people against just um a headline spinal

reflexes of just like yo like like let's double check the headline here um uh yeah but people people don't seem to learn they keep they don't seem to learn granted we did have our designer photoshop on a pretty well like a salana logo onto the T-shirt that I I was wearing I've never worn a salana t-shirt but like now in this graphic that I had so it's like kind of not fair when you employ your your graphic your very Chad graphic designer to like make something look very very legit um this was actually Ryan's line um I really just want to help salana decentralize said Hoffman in a tweet announcing his new role this goes beyond the Nakamoto coeffic for me this is about actually making a difference anyone with a data center should be run should be able to run a salon of

validator yeah see like if you actually read that stuff you would know that it was a joke but as you said people seem to just read the headline and and go off of that but uh I mean yeah I will say this was one of the better I think April Fool's kind of jokes because the whole point of it is to trick as many people as possible Right like and I think you tricked a lot of people oh for sure yeah okay so there is also just a discussion that I think some people have had about like hey April's fools shouldn't be good we should not accept April fules in the crypto industry because it's I don't know do they do April fools in Australia Anthony not not really I mean there's some of it but it's that's just like us trying to import import American culture

but no it's not really a big thing here April 1 is kind of like a US Centric phenomenon and so so I got messages that Asian media saw this report and started broadcasting it in Asia on Asian news channels as truth because of course they would it's not April fools isn't a thing in Asia and so apparently like there's a bunch of people in Asia who actually think I'm the VP of decentralization at salana um and so like I think there there are also other April Fool's jokes that like accidentally moved token prices because I kind of thought that their uh April Fool's joke was uh irresponsible uh and so granted I take the point that like we do need to be careful as a crypto industry where we have like markets and cross-cultural

differences where like actually April 1 is kind of just like a us only phenomenon um but nonetheless like we can't we can't not do it we're a media platform we kind of have a lot of opportunity here yeah yeah I think I remember I did it last year just like as a as a thing for my viewers on my podcast where I introduced myself as Charles hoskinson instead of myself and that was like like if you get if you get fooled by that that one's on you yeah exactly exactly so I that's that's all I really did but yeah no it's definitely like a very us-centric thing and that's why I think people are you know in crypto have an issue with it because of the fact that uh crypto is global right like as you said like there's these Asian media Outlets that reported on

this and and that Europe is a huge player in crypto as well so all those people may be seeing this being like what's you know not we're not going to double check the DAT with this isn't a thing that we do sort of thing so yeah that's how I kind of view it as well yeah so uh just a as a a takeaway if you do an April Fool's joke don't move markets in the crypto space Anthony thank you so much for stepping in a substitute teacher uh we always appreciate you when either me I need to climb a mountain or Ryan needs to go hang out with his fam uh we always appre apprciate you coming in uh if people don't know anything about you who are living under a rock and they just appreciate your takes uh I think you have a place to send them where should

they go yeah I mean you can just find all of my content at the daily gay or if you've got my Twitter it's on there if you want to just search me up on Twitter all the relevant links are there I mean I do a daily like every weekday kind of news recap of what's happening in the ethereum ecosystem pretty technical pretty deep dive like it's not going to be kind of for total noobs to the ecosystem but if you want to learn more about ethereum yeah you can go check that out yeah very consistent 30 minute videos uh about what's going on in the ethereum ecosystem Anthony does the whole thing in a single breath so it's very very efficient uh and uh you can you can get that I listen to it on podcast you can also get it on YouTube bankl station thanks again for running

through the week of news with us with me and Anthony risk and disclaimers of course crypto is risky you can lose what you put in but we are headed west this is the Frontiers not for everyone but we are glad you are with us on the bank list Journey thanks a lot [Music]