Bankless 🤝 Daily Gwei Friday Livestream! (Uniswap, ETH 10k, Optimism)

Transcript

not the periscope league no periscope was on bankless that's weird hang out we're not yet live on the youtube here we are okay yeah we're live all right i'm gonna delete a tweet and yeah we are good to go hey hey anthony what's up hey man what's going on oh you know friday night friday evening for me yeah saturday morning yeah yeah exactly good morning to you sir yes good evening to you sir

i mean i was gonna say what a crazy week right uh i think we had like some really hype news and some really sobering news and of course i think i'm talking about the unisop v3 details which um you know i think everyone is covered to death at this point but also like the optimism uh delay um unfortunately so i guess we can roof on the the v3 stuff for for for a little bit um shall we shall we on this livestream take our optimism eyes off on our twitter profiles you know it was funny because i was thinking to myself like how long am i going to be leaving these eyes on here i'm like surely they're going live soon and now i feel bad for taking it off because i don't want to like be like i took them off because i don't believe in it

anymore right yeah yeah exactly so i i don't know maybe i'll just put like uh i was thinking of just putting the the red and blue banner across my eye so it's like optimism and arbitrary so like red versus blue because like you know i think average room is going live like before optimism now so like rather soon and that's that like i guess you could call it their main competition so yeah it's going to be i mean this this is what what i kind of like wrote about in my in my newsletter yesterday it's more about the fact that you know it's not so much it's it i don't think it's like so disappointing that optimism delayed a bit for for you know good reason i think they're just going to seed some ground now and lose some market share to these other solutions that are going live

before them maybe it doesn't matter too much because it's only three months the delay and they've obviously obviously got a bunch of projects lined up like unisop obviously you know i mean it was an open secret but they they confirmed that they're going to be on optimism um when they detailed v3 uh and i think they're still going to go live in may i still think unisof will be on l2 in may so maybe this delay isn't really like a huge deal i i think the the through line that i'm getting is like it's a delay for users right for for people that want to use it but it's not a delay for developers and the through that i'm getting is that like when it does go live and live in july it will be with a much more like robust ecosystem like out of the box ready to

go so like you know uh if it had gone live in march or april it would have been like okay cool now you guys can come build and maybe the users will come too but now it's like no come build now like we'll get everything figured out so that when we go live to users it'll be a god damn canon ball of a splash that's been that's been my interpretation yeah yeah i had the same thoughts as well around that uh i think you know yeah by the time they get to i guess well i guess we should clarify for for for listeners for viewers um the the thing that they delayed is their public net launch so a kind of main net where anyone could build on top of it right whereas they're already on main net just in a test net fashion they're

working with synthetics i'm sure they're already working with unisop and they say they've got like a dozen teams lined up so you know it's not like these things can't go live but the the thing is is that it's completely centralized right now so if you were to use optimism you know there's there's training wheels on it there's like you know admin controls on it and all that sort of stuff and you can't deploy your contracts unless you've been whitelisted as simple as that so from that perspective it's yeah it's just a delay for the public mainnet which as at your point david is actually quite bullish because um there's going to be an ecosystem that comes out so you can look at it that way where you know i don't know how these other layer twos are going to go i don't know what arbitrary is going to look like from day

one um you know immutable x is coming out soon as well uh that's not generalized i guess when we're talking about l2s there's like this the the the app specific ones like immutable x dydx loop ring and the generalized platforms like optimism and arbitrary which are actually a lot more complex to get right because you know when you generalize anything you lose control a lot of the time right and you that's that's part of that's a feature and not a bug but losing control and and having to like but guess pray that nothing goes like too critically wrong is is daunting especially for teams that are building bleeding edge stuff so you know this is like what happened with eth2 we we didn't launch proof of stake for so long and we did so many test nets because we wanted to make sure we got it right the

first time when we went to mainnet and i'm sure that's what optimism wants to do here i have a question for you because i'm actually i'm decently familiar with optimism i understand how that works but i'm actually just very rusty on arbitrarum can you help me understand arbitrary yeah yeah i mean the reason why i say it's a quote-unquote competitor is because they're both using optimistic roll-ups uh whereas you know a lot of the other uh solutions like stockwear uh or that are building diy dx immutable x and loot bring and diversify they all use zk roll ups or some some flavor of it um so but while looking into arbitrary i guess like the main thing that they promise is that they're going to be 100 evm compatible so you'll be able to essentially port your smart contracts

from layer 1 ethereum two other trims kind of layer two and it would work out of the box just fine with lower fees right much lower fees and faster transactions uh optimism also promises that but they have a their own virtual machine called the optimistic virtual machine which requires i mean which can't it is compatible with the evm because there's a there's a translation language in there but from what i've seen it's not like 100 compatible so there are some things that you would need to change um you know depending on what your app looks like as a developer um but you know from what i've seen it should most of the time work just fine out of the box now i don't know like the technical details as to why optimism did this rather than being full evm compatible if arbitram can do it um you

know i'm sure there's like giga brains at both of these kind of um these uh these organizations and these teams but yeah that's kind of what i've seen but at the same time like you know promises are one thing what it looks like and and how it works on mainnet is another thing and i i should mention arbitrary's actually got their main net candidate on the cobain test net right now which obviously doesn't mean much to to users but to develop as it does because they can just you know play around with it start building it um and they've had some demos uh definitely on their layer two that just took existing code uh and i guess you know why that's important and is that the developers don't want to have to like rewrite their contracts right from for numerous reasons right takes it takes you know a while to do it

depending on how complex your app is you start changing things right you you start losing kind of like site of what your app looks like and you know the security goes down you have to basically get audits again you know which are not cheap and or you know the auditing firms right now are like booked for months uh so this is why we've actually seen these other evm compatible platforms i guess like bsc you know you know be able to clone these apps so easily and actually get users it's because it's just ethereum right bsc is essentially just a centralized ethereum so when you have a layer 2 that is a decentralized ethereum right essentially at layer 2 that inherits ethereum security um you know and can be evm compatible that's what everyone's excited about i think

yeah and i remember you had that a piece on the daily great where you talked about how like the actual moat turned out to be it turns out it's the evm right where the thesis is like well it's easy for binance martian to just fork something on from the theory and put on binance marching and get a bunch of users but really at the end of the and end of the day that just solidifies the role of the evm which is native to ethereum um and everything comes down back down to ethereum at the end of the day regardless the the i don't know if this is true with uh arbetron or not and i'm assuming that what this is probably true that all l2s have some sort of transaction ordering responsibility uh because like you have to order or bundle the transactions in a specific order and

then deploy that back to the main net and i know that optimism the optimistic team is specifically using their optimistic roll-up system to create what is more trying to solve this problem of minor extractable value using responsible order transaction ordering and then using that the value of mev which they are capturing with l2 and the rights to order those transactions which can be determined by optimistic uh the the team uh i think this is right and because they are harnessing that energy we can now use the mev for we can harness the value of that mev and direct it in certain places that's maybe that's something more in the social

layer with optimism like that's just something that they understand to be valuable and it's probably just as equally uh possible with arbitrarum but i know that like carl flores and jinglon are very very dedicated to harnessing the power of mev for good for public goods and that's something that that particularly interests me i don't know if you know of any anything about arbitrarily about any mev or anything related to that yeah yeah i mean optimism has been talking about this for a while uh basically making mev a public good on their layer two and you explained it well i think i mean i'm not sure what arbitrary is doing i don't think other trim is going down that road i think they might be doing something else i haven't really seen much there but yeah optimism has been talking about this for

for a while and actually one that's in practice today and live today is is hermes network now hermes network went on mainland like a couple of days ago and they're basically very similar to zk sync in that they're focused on payments uh of like ethernet rc20 tokens and all that good stuff but they have something called proof of donation which is essentially what you're talking about where they'll basically i guess auction off the rights to be a you know the the technical details right now escape me but they basically do what what optimism wants to do as well um but then the proceeds from that are actually donated to ethereum public goods so it's essentially you know taking this mev stuff which a lot of the time can be parasitic to the network and parasitic to you know the overall ecosystem and and essentially

giving it back to you you know public goods which obviously you know git coin enables in a very really big way you know we just had the the recent round finish and it was a record breaker which is awesome but if we can have those funds put towards like the matching funds uh you know and even maybe even on a continuous basis right that would be really cool like you just have like these mini kind of matching rounds that happen through this mav that is extracted uh for the public good because yeah right now i mean you know it's called minor extractable value but most of the value i think is not being extracted by miners yet even though they are the players that can get the most out of this right but it's only going to get worse from here um and mavs i mean if you if you're like a

giga brain or you know in ethereum you're working on mev it is one of the hardest problems to solve right now right um and it is it is something that we don't even know if it can be solved right we have some ideas and theories about it uh but you know and and if we can't solve it right let's just um you know you you know work around it i mean i remember on justin drake's uh podcast with you guy uh with you guys on bank list he basically said you know if you can't solve it with cryptography you can solve it with crypto economics right which i think is what the approach to me is here with like the auctioning off and you know donating proceeds because maybe one day we can solve it with cryptography but that tech isn't there yet from what i've

seen yeah yeah i agree with that the mev story i think is going to be a story of the decades at least in the crypto world uh because it has such such massive like long-term implications like if you if we can harness mev for public goods in in the way that in a max in a maximally capable way that's so bullish for humanity because we can just like literally it's a it's a new era money printer is what mav is and if we can harness it then we can direct that and so this is the overarching conversation of mev are we able to as a as humanity capture mev and direct it into things that humanity thinks is good like if we could harness mvv and forward that energy into like cancer

research or climate change research like that is that's peak humanity that is peak ethereum success and then the worst case scenario is that like we can't harness it and it actually just goes into the profits of people controlling the network which is going to be future stakers i guess current miners future stakers and then people just pocket that that eath and they're just profit maximalist and that value doesn't get directed anywhere so like there's actually a lot to lose here uh and so you're totally right like the reason why what you call the gigabrains are working on this and why they're motivated and working on this is because like it's probably it could be like humanity's biggest sword ever i mean in an older article i wrote on bankless i

called uh like a is mev is the sword that can slay moloch or transaction ordering is like the weapon that humanity if we can figure out how to build this sword we can use it to slay moloch and moloch is the god that represents human coordination failure it's a hugely important story and i i just have a fun time following all these giga brains that i would never be able to hope to to follow or to keep up with in my own right so i just like feed off of their energy yeah yeah and and you've written about this a lot like with the moloch stuff and i know you followed that really closely and it makes a lot of sense and and the best part is it comes from like the economic activity of the network right like it's not just something that we're we're creating out of thin air or

bad actors are creating out of thin air right it's actually coming from the economic activity so more more defy activity on ethereum more mev and for that for those who don't know thermal energy of the ethereum planet yeah yeah exactly yeah that's pretty good way of putting it um and you know for those who don't know what mav is it covers like a a wide range of things but for simplicity it's basically like things like front running so you know you may have heard of you know when you're doing like a transaction on with your main net your transactions go into what's called the mempool which is like the waiting area before they're included into a block now in that mempool anything can happen right like someone can front run your transaction because they can pay a higher gas fee than you uh and then the miner's going to accept

the higher gas fee transaction then then your transaction for the same for the same transaction right and and the reason why they would front run you is because they find it it profitable to do so um and you know that extract the value out of that and on top of that um you know the reason why miners have the edge here is because miners control a transaction ordering and they can basically put any transaction they want at the start right and also pay zero fees because they're paying the fee to to themselves essentially so they can say hey i'm going to do this transaction it's going to be super profitable for me uh i'm going to front run absolutely everyone and i'm going to pay zero fees for it right so they haven't looked i mean they're going to get more sophisticated here because it's a rather

new thing that has only really been profitable because of the rise of defy uh but they're gonna they're coming and they're gonna do more of it especially i mean with the fact that one five five nine is coming and he's gonna i guess cut their revenue a little bit they're gonna be hungry to to make up for that and as you said david this doesn't just apply to miners this is also stakers just any any any kind of block producers that control the transaction ordering um you know that's just by design yeah l2's exactly yes exactly full circle yeah yeah exactly so um but we'll see how it evolves over time i'm sure that like all the researchers want to be the first ones to solve this um you know so they're definitely working on it like i know the paradigm guys that the are very

big on this so the fun that yeah yeah they're huge on this i mean they've written so much about it um so if anyone's gonna solve it i would assume that that's probably them um and you know it's it's a pretty big like i mean if you're yeah yeah yeah exactly and then if you're if you're if you're one of the one of the giga brains and you're competing with the other giga brains you want to be the the giga brain that solves this right you want to be known as the the person or the team who solved mev uh so yeah i i don't think this is going to be something that won't be solved sometime in the future i just think that the timeline for it is completely unknown um and you know even if we can do it in theory in practice it may be

too computationally expensive and this goes back to what justin drake was talking about where we have theories of things that can work but it just it takes like a very very long time to compute it and it just doesn't work in practice right uh so eventually when you know when you we when computing power goes up and the cost goes down everything and and new ways are found to do different things we can probably get to a point where we can make it workable but i don't know if that's going to be any time soon yep yep important story to follow let's uh let's turn to unit swap uh what are your thoughts about the unit swap drop yeah i mean it's funny because overwhelmed expected well overwhelmed because like it had been built up so much yeah um as like you know there's so

the height behind it was insane yeah yeah yeah i mean guilty as well right i mean i made that meme like on on what was it sunday i dropped this on like monday you know what i mean you know it was funny when i was making that meme and the one i'm talking about for those you haven't seen is the uni swap hype meme the video um you probably saw it but uh the reason i i the funny thing is is like it was like midnight my time like this is a time sensitive mean if i don't put this out like hayden's gonna drop he didn't stop v3 and it's going to ruin my meme and then yeah i mean i was up till like 2 3 a.m doing this because you know i think it might look easy but it takes forever to make those those memes but um yeah

yeah so in general like with v3 i think the most exciting thing was the concentrated liquidity stuff that they brought out but at the same time you know it was it was the reason it was i guess like whelming is because like you look at the trade-off of concentrated liquidity and the trade-off is that passive lps and are probably not going to be a thing anymore you can't passively provide liquidity because you're just going to get beat by the active you know managers and this is what happens in the traditional kind of order book space where you know the market makers on an order book are constantly changing what they're doing they're not just like passively putting liquidity in and being like you know let's leave it on the books it's fine uh they're constantly on the move and that's why you know retail has never

been able to compete with professional shops on the market making front you know they can do things here and there but it's like a a kind of like individual basis thing it's not going to be super profitable but um that's why unisop was so revolutionary it made anyone able to kind of market make um you know and basically just do it passively but now that's going away and that's a trade-off for getting this massive capital inefficient that capital efficiency we're getting from from v3 so i don't know what your thoughts are there i haven't listened to to to the thing that you and ryan did yet right so you just woke up so you probably haven't seen uh haseeb qureshi's uh tweet thread about this and he has some really interesting takes about this i'll i'll send it to you afterwards but he uh he

said that the uh you're totally right and so and especially because of the nft aspect of things like lazy lping is not a thing anymore um but he says well now lazylping is now a a something that could be built on top of uniswap by service providers my mind goes to something like urine where yearn can provide a lp a unit swap eat die lp vault with optimal market making strategies and so all of that desire to be an lp can be turned into a vault or just some sort of product right and so you like you just want to submit your capital and let you and let urine do the rest i think this has massive amounts of surface area for protocols to be built

on top of uniswap to provide that same sort of service and to be extremely competitive uh and when i was talking about this with ryan he was like well what what's the incentive for these protocols to open up their their uh doors and allow other people to get access to their strategies and to me the answer is simply performance fees which makes sense to urine because urine needs that that that token to receive inflows to the wi-fi token uh so that like urine being built on uniswap this product seems perfect for urine um or any other yield aggregator system as well yeah yeah i mean i definitely and i'm glad you brought that up because that was definitely something that i thought of too and you know i mean there's some

like it goes into these asset management kind of like platforms now obviously you know i'm an advisor to set here so you know obviously that's something that we could build too and then sure yearn and i mean there's there's tons of other platforms out there now um that are doing this so and i expect this to be a pretty big opportunity because so when you think about the concentrated liquidity stuff as well because because it's so capital efficient and then the example that they gave is that it's like 85 percent more capital efficient which means that you can put in like 85 percent less liquidity for the same if not better kind of proficiency and and fees and volume so because of that where's all this value going to go right if if someone's lp a million dollars and then they take out like 85 of that where

is that going to go and i think it's going to go into a lot of these other platforms um on d5 like uh you know the money markets especially because you can use that as as kind of collateral to to even draw more kind of stuff here and you know kind of do more more kind of things with this so there's that aspect to it which i think is going to be big and that also flips the the kind of like metrics on their head like we shouldn't be measuring things by tvl anymore to be honest like total value lock becomes pretty meaningless when capital is very efficient we should be measuring it by volume and and fees generated so for like units of it would be volume and fees for um money markets it would be loan originations right for make it would be the stability fees so if we

start measuring that and measuring protocols based on that which is something that that a website called token terminal does uh it becomes a much better kind of way to value these protocols i think because you know tvl you can have a billion dollars of tbr but if it's unproductive if it's doing nothing if there's no fees generated you know if there's no volume on that then really i mean in reality your tbr is basically just there to find your token the only reason you have a billion tbl is because you're getting a token for it and we've actually seen this play out to an extent with unisof versus sushi swap where 2g swap almost has as much tvl as unisop does but unisop is still dominating on the volumes which means it's dominating on the fees and that's what's not to say that that sushi swap

is bad they're building other products but you know just looking at the raw tvl doesn't give you the full picture yeah yeah totally and there are so many metrics like this that you know d fight we we kind of don't have good metrics yet because we just don't really know what to pay attention to uh on the the weekly rollup that we did me and ryan uh highlighted this one metric that d5 revenue crossed one billion dollars and so like that was 100 billion or one billion dollars paid to fees for unit swap lp sushi swap lps like ave fees maker fees just put like all all fees right one billion dollars so congrats defy but also what does that mean for the tokens that govern over these fees because like

maker dow fees are not the same like ratio as a result of volume or tvl as uniswap volume or tvl right like like it's one it's not one to one and so like that's that's not very specific uh and then and then like you're totally right there's a difference between the tvl versus fees for unit swap and sushi swap like d5 honestly has like terribly inaccurate metrics because we just don't know what to look at everything changes so fast like unit swap with this whole like concentrated liquidity thing just like invalidated so many old metrics and are now making so many new metrics that we need to pay attention to this is just inevitably like the cost of an industry that moves so fast is like stuff becomes so stale so fast

that we can't ever settle on of an accurate metric yeah and and i think on the on the fee front as well like even that you can't take is just like oh this protocol generated this many fees because if you look at it right there's like the supply side of the fees um and so like okay i'll put this in maybe maybe pure english here instead of like using fancy words so essentially the the fees generated by uni swap right now are all going to the lps so units of the protocol right is not actually generating any fees right it's all going to the liquidity providers so the the token does not capture any fees yet i mean sometime in the future it may but right now the token is i mean the most like overvalued governance token i mean i don't know if i'd call it overvalued

actually but like i mean it's worth so much for i mean and that's just like on the on i guess like the the option that the fees are going to be turned on which people believe it will but we don't know when um and then you look at something like maker where the protocol is actually making fees right the stability fees are not paid to cdp owners or whatever our vault owners um those stability fees are gone and gone to like buy mkr and burn it which you know puts deflationary pressure on mkr and all that all that good stuff so that's another key point is that you can't just look at fees as like you know not all fees are created equal so to speak and you know even when unit stop turns on fees for the token holders it might only be like 0.05

so you know still you know the majority of the fees is going to be going to the lps and it won't be going to the the protocol itself and then the token holders so that's that's another thing and i totally agree with you that you know this this space changes so fast there's so many different designs out there for like how tokens capture value um and you know how different protocols capture fees and where those fees are directed to so it's it's messy and you know if you if you just take like the the tvl as like the the thing that that matters uh you know you might buy something based on tvl you're like oh this totally you know this app has like so much tv i'm going to buy their token but in reality i mean it's the tv is dead tv it's not doing anything it's

it's fleeting so that that might not be the best way to kind of invest in things but at the same time because it's a bull market it's kind of hard to tell because you know everything's going up right like a rising tide slips all boats and um you know and i think that's hard for investors but if you're looking at a fundamental investment into things i would go to token terminal the website they can just google it and kind of check it out um they've got a lot of great metrics on there but i would also take into account that not all fees are created equal and you really need to to you know study it in on on a more deeper level and also make some assumptions like everyone's assuming that uni stop's gonna turn fake capture on what if it doesn't i mean there's a world where it

never does like what does that mean for the uni token is it still gonna be worth like 30 billion dollars or whatever is governance is governance alone worth 30 billion dollars that's a really good question and like one of the things we we forget is that like i or actually i think about on a very very uh very frequent basis and i wish there was this was a broader conversation in the crypto space is that like if what what happens if like all these tokens that that govern over fees choose to never actually turn on the fee capture mechanism and it's and it's exactly what you said it's a governance only and then then it just turns into what we have in the traditional stock market with like apple and netflix and like all these other extremely highly valued tech companies like what does the

at owning one of those shares actually do like that's just a governance token and like people don't even govern with those things like and they don't get any fees so like they're only buying shares of apple so they could sell them at a higher price at a later date like that's not revolutionary and so one i think i was we were talking about this last week where if like all these defy tokens all like just shape up to be just like non-value accrual tokens and their only governance tokens and they are just valued on the meme of the governance that's kind of a bummer and that's actually something that is something that alpha finance did this week was they actually turned on fees on their protocol and alpha is actually paying out fees to alpha holders interestingly denominated in alpha tokens um but like

that's that makes me happy because i'm like that is a way to evaluate the alpha token actually based on the fees that the alpha protocol generates like you as an alpha token holder gets more money because of the fees right and there's also the trade-off like maker dow charges fees and it burns this token and so in theory it's paying its holders that way uh and then also in theory like uniswap's in uniswap doesn't pay out fees so it can invest in growth in theory that's like why people don't turn on fees and so maybe you get a capital appreciation instead of fee revenue and there's that conversation but uh i'm generally a fan of like what's that what's that phrase a a bird in the hand is worse to in the bush

which means like you know if it actually puts money in your pocket that's worth something more than theoretical money in the future yeah yeah and it's funny because i was actually thinking about this last night um to your point about like different like tech stocks especially that may not pay a dividend or may not pay anything back to the holders of the stock um and it's like it could be called a pure governance stock but like you know retail is never going to buy up enough apple to be able to govern apple right it's just like i mean it doesn't work like that there's a board and everything uh for as an example but it you know do we get to a point within like crypto where uh or indeed fight i think we're already at that point where people are just buying things as like you know okay

unisop's massive right i like uni swap i want a piece of unisop i know that buying this token isn't technically a piece of unisof because i can't really do anything with it yes governance is there but my vote's not going to count for anything but i still want to ride this with this train right so it's basically like you're getting it's just a way to get exposure to the success of something even if it doesn't um you know equal fundamental kind of value accrual to the token right which speculation can can keep markets going for for forever right like speculation fuels most of the things out there you know for for example like bitcoin doesn't produce any any revenue itself right for its holders like i know maybe maybe that's going to trigger people because they talk about intrinsic value right but bitcoin doesn't produce any value for its

holders it actually dilutes them the network because of the mining um you know because of the block reward but bitcoin is a trillion dollar asset so you know when you look at stuff like that you can see that people are happy holding and speculating and buying things that may not give them any cash flows but they are it's a proxy to the success of the network so as the bitcoin network grows as adoption grows your proxy to its success is holding btc same with eight i mean eighth doesn't give its holders anything yet one five five nine will but you know eth is still worth 200 billion dollars so from that perspective it's not hard to to kind of maybe make the leap to saying well these tokens only do governance but it doesn't really matter because of the fact that uh you know people just want a slice of it they just

want their piece of it they just want to speculate they want to feel like they own a piece of uni swap even if they technically you know don't right and in theory like the the tantalizing thing about this is that like uniswap is just one transaction away from paying paying people a bunch of money just turning on turning on the fire hose and being like here's the fees you guys wanted and so that's like everyone is so teased about it it's like well there's this absolute torrent of fees going through uniswap it's the third most fee generating cryptoeconomic protocol after bitcoin and ethereum no it's ahead of bitcoin it's number two it generates more fuel than bitcoin does and so like people like people are buying these tokens like well if they turn that on that's a lot of money coming my way yum

yum yum so that's always fun yeah the narrative is incredibly powerful here right um and we all know that the crypto space especially runs on narratives you know there's and then there's a dark side to this where a lot of stuff is just completely overvalued and not to bash it again but cardano is like the just the quintessential example of something that is like completely overvalued for have watching if you don't have smart contracts yeah yeah but like hacking you like like how can you be worth like whatever it is now 40 billion dollars when yeah when you don't have anything on your on your like it just for me it just like is mind-boggling like my my my my um my corner shop you know the the the milk

bar generates more bloody revenue than cardano guys like you know she might should the milk probably worth 40 billion like and that's what i'm saying like because that's all speculat like a lot of it is speculation a lot of these narratives right um you know it's it's very hard to kind of like see where things are going right if if something has a good narrative and a good following and he's getting good adoption which you know even though like even though android doesn't have smart contracts it still has a lot of people interested in it right so there's a lot of people buying the tokens it's so many right and then that plays out for everything because if you see the more token holders there are the more people that holding a token you know the higher value it is it is because at the end of the day like when

you're holding a token you're taking it out of supply and there's less available on the market and all that stuff so you typically see that the the ones that are valued at least are the ones that have like a small group of holders so say you've only got a token with like a 500 holders that's actually really bullish because if the project is actually going to do well and does well over time more people buy the token and then you are in at 500. so it kind of scales up from there and yes you have boom and bust but over time if you overlay token holders to like a price of a of a token or a coin you can kind of map that growth out i don't know raul is big on this and like it goes back to the metcalfe's law thing but i i think it holds true and you know

he's applied it to other things like xrp and as much as we hate to apply it to xrp because we all know that xrp is what it is it still counts because of the fact that it doesn't matter what xrp is or doesn't matter what ripple is the fact that people are buying it and holding it is taking it out of supply right taking it out of circulation it reminds me very much of just like the green frog phenomenon where like all these like and pseudo-anonymous people on these forums all realize that if they band together and coordinate they can make this token move uh and it's really interesting to me that this cardano energy started with immense amount of cardano energy cardano or shells are up in the bank list like youtube twitter mentioned or or like youtube comment box

every single livestream we do and like it all started right after the xrp security fraud thing right and i feel like there's like this secret underground like cabal of people that are like are just like working to coordinate to like okay well you guys like the xrp game is up let's let's shift to cardano and start like shifting like pumping cardano and maybe i don't i don't know maybe maybe there's a bunch of like 70 iq people out in this space who are like well it wasn't xrp so i'll just go to you know maybe not not to well we're not going to make friends yet today david no no no no no no yeah yeah i mean the funny thing is though like to be

fair there is an element of that with like everything right we can't just say that our holy coin has the 150 iq chad holders and your trash coin has like the 70 iq holders right if you hold it if you have 150 iq it's a lot yeah yeah so i don't think we could say that but i do think there's an element of like you know some some new people are attracted to things more than others right for various different reasons for various different narratives and i really do think it's that because i'm not gonna not gonna stay here and say that you know i was like the perfect you know super intel intellectual when i was new to crypto right where you know i first got into crypto in 2013 with bitcoin um uh and then back then i was sorry i bought yes

yeah well exactly so like i mean i bought all matter of crap man like in in 2013 i was pumped and dumped on like many times i was just like so noob i fell for everything and um you know and even in 2017 like when i got back into crypto with ethereum there were some projects that had like very promising or at least at the time i thought were promising prospects that i bought into one of them was aeon um for anyone who remembers aeon that was i mean i don't think it's a scam or anything but it was just like an ill thought out project right um right and maybe it was like uh it was too early because it was trying to do like interoperability and things like that which hasn't become a thing until now at least but you know you kind

of like just have to learn from that you learn over time like bear markets are very good for teaching you these lessons and you know people who might think that we're toxic for kind of like saying this stuff you know come back to us in two or three years and see how you feel then don't be here are you gonna steal yeah exactly are you still gonna be like happy if one of your your favorite coins falls 99 and then it doesn't recover because the project turned out to be to be crap right um you know we all learned that lesson the hard way and i'm sure a lot of people are going to learn that as well so i think when people call class toxic or whatever for calling out this stuff you know i guess just wait wait and see how how it kind of shakes out

here and that's not to say that a lot of you know d5 projects won't also kind of like go down 99 if we go into like a prolonged bear market um you know that that's going to happen too but i think you know at least when you look at d5 you can do some kind of fundament fundamental analysis on it right and find a flaw being like okay well if it's generating this many fees and you know the token price is this and do a price of sales ratio and okay well this is the floor and anything below this is like a bargain you know a bargain price um so yeah it's just it's always funny in in bull market seeing the new people coming in and relearning the lessons that we've already all learned and because of that we come across as toxic to telling people what they should and

shouldn't do and i try on the top of what they should do but it's just you know it's like it kind of feels like when you when the elderly and like your grandparents you know they impart this wisdom on you and they try to tell you things and as a kid you're just like taking 20 years to learn it exactly it's like no no i know better than you like i'm 10 years old i know better than you um you know it's the same with your parents but not to say that we're trying to be like you know parents to people in crypto but i think a little bit just paying attention to people that and learning and well i mean i probably won't go that far i'll try not to like uh i guess like be a lecturer but at the end of the day i

mean we both put out like tons of educational content and it's up to people to like just learn and listen to it and we have our own biases obviously like you know i wouldn't call us eat maxes but obviously we're very deep in the ethereum rabbit hole and probably not gonna ever come out of it um but yeah it is yeah yeah i don't want to come out man i'm sure you're all the same here as well yeah uh the other the obstacle that we have is like it's hard to impart upon people the the about the value of fees and why fees are good in in a bull market where like people are

coming in they're just dipping their toes with like you know five hundred dollars maybe a couple thousand dollars and then they see a uniswap transaction on ethereum and like this cost thirty dollars this isn't [ __ ] working this is not the future of finance this is bs what has low fees because obviously whatever has low fees is going to be the thing that wins like that's a completely rational train of thought and it takes a long time to figure out like why fees are so important and like the best way i'll try and explain as fast as i can if your blockchain collects fees it doesn't have to issue as much issuance to pay for security and so then therefore your native asset is money because it's scarce that's like

the best explanation i can give but again that people still have plenty of questions as to like why well why does it need to be money like well like can't we can't what about eos eos has zero fees like why can't eos be money like it it takes a long while to like kind of come to these conclusions yeah and it's it's funny because like i i mean i wrote about this back in june of 2020 about the high fees because they were just starting to kick off back then and i actually argued that there was it was an extremely good thing for ethereum for multiple reasons and i didn't even touch on that reason about like the actual underlying token becoming money the the reason that i've kind of uh i guess like my my number one reason is that it actually um encouraged scaling

efforts right because no one was looking at scaling in any real capacity there were some projects here and there but no one was really really looking at any real capacity when when you know the grade price was like less than 10 right right because there's no use building infrastructure when there's no users and we've seen this with the ghost chains they have you know quote unquote more scalability right they have cheaper fees because of that but their ghost chains like no one's using them and and and you know as you get more usage of course the fees are going to go up right there's no such thing as like unlimited scalability right there's there's definitely limit and then you have like trade offs of decentralization and all that stuff but essentially users first right then comes the infrastructure it's the same in real life like no one builds like a 10 lane

wide highway right if there's no city right if there's if there's no cars if there's if there's no traffic um so from that perspective you know i think it's good to just look at why ethereum still has like the most users by far why the network is the most used by far right even more use than bitcoin on a fee basis and and then compare and be and ask yourself the question why is this the case why is this the case even if the fees are like 100 way which is not cheap in any in any kind of reality um and no one's saying that you know we think it's a good thing that the fees are high for the long term we think it's a good thing that people are priced out of the network we think it's good that only us like you know um you

know holy people can use this right and then you kind of like peasants can't use it we're not saying that right we're not saying that at all like i don't like paying the fees either like it's super kind of i don't like it if it hurts man that's bad exactly like that's that's it and and i think like from that perspective you know the only reason i would argue that high fees are good is because it encourages scaling um as like the number one reason i mean there's other reasons but that's number one and because of that we now have like all of these scaling solutions going live or already live um and i know that we're not there yet we're not like to where we want to be where we have like all the top apps on layer 2 like unisof and things like that and everyone

experiences that but that was never going to happen if there wasn't high fees and because the reason why ethereum has high fees is is because it's decentralized in the day it's it's very decentralized and we can we can raise the you know i guess uh to use a term that bitcoin is used increase the block size limit on ethereum right now which is the gas limit we could do that right now but the trade-off of that is that we make it we give up some decentralization if we double the block uh the block gas limit right we essentially double the state size we make it harder for people to run nodes this is the same argument and you know i disagree with bitcoin is on a lot of things but they've got this right they've got this exactly right yep i mean we could just like turn the gas

limit all the way up and then just have it run on vitalik's computer and then we would have anything in scale like yeah let's just do that like why what why don't this is what eos did right they was the first one to do this and a lot of other projects do this now too they basically just like scaled up to 21 super nodes right where just 21 kind of like nodes and they're not people because some of the people ran multiple nodes here and some of the groups ran multiple nodes but yeah they scaled it up to that and that that was what gave them like this kind of scalability but they ran into other issues with this right like cut catalyzation where people got together and were like well you know we can make money you know banding together here and like we can make more

money just voting each other in because it was like an on-chain voting system um and i think a lot of the other platforms have done this too where they've basically made it impossible for uh end users like us to run full nodes and verify the network's authenticity and and if the network's actually doing what it says it's doing and giving all the power to these kind of like people that have lots of money that can run these super nodes um and then and even beyond that it's not just money it's also the social aspect because you have to be voted in to be a block producer in these things so even if you have the money you know what you have to do is you either have to bribe someone to vote you in or do something in the community that gets enough of the block producers to say

enough for the token holders to say hey you know you can be a block producer um so that's not what we want for ethereum and that ethereum's proof of stake is is completely different to that uh but but that comes at the trade-off of scalability right yep and and i was talking about this with ryan's like if you don't have a defy pulse put out this uh uh question like the twitter questionnaire where they said like if you could only have one of the three of the scalability trilemmas like which one would you have for those that don't know the scalability trilemma is the blockchain scalability trilemma is like you get to pick two of three things decentralization security or scale and you can only really pick two of those things at the base layer uh and like and so the question was if you could only

have one of those things what would it be and 50 of the people picked decentralization and then the other two were trade-offs between either security or scale which like i'm glad decentralization won but like if only 50 percent of the people understand that this entire revolution is based off of decentralization then like we there needs to be some more education right because if we don't have decentralization we don't have anything like we'll just do ethereum on aws like that's just what we'll do and then and then it'll get shut down as soon as like as soon as well it already would have gotten shut down at that point because of all the like the the how defy is inherently a gray area for legal illegal stuff uh decentralization is the underpinning of all of this there's

nothing left after that yeah yeah and i think that on the education front definitely uh need more there i mean need to reach more people there but you know it's funny because people always kind of come to me with these questions they're like okay well you know is ethereum going to be scalable i'm like yes it's just taking a different road to these other trains because it's scaling it at layer two predominantly rather than layer one even though we have layer one scaling come with sharding but it's a bit it's a bit different right but then i kind of say to them like you've given you're given two choices here would you rather have a super scalable kind of like blockchain you know in quotes um but it's pretty much centralized right it's controlled by a small group of people um but like it's scalable you can do all your fun

you know stuff and it's super cheap and whatever and that's all good and well and it works for quite a while and then eventually it's like the the turkey that thinks it's fine for a thousand days and then eventually gets its head chopped off right it works until it doesn't because like if you don't have something that is anti-fragile that can resist nation states or it can resist special interest groups then you do not have a decentralized system so most of these systems right now are not in that camp now the second choice if you can have something that is extremely decentralized extremely secure but also scalable on it in a different way right so this is ethereum where we're going to have the decentralized and secure base layer which is going to be very resistant to attack especially from nation states and then we're going to have scalability on

layer 2 right but it's going to take us a bit longer to get there which which solution do you want now when i explain it like that to most people they say well i mean maybe i'll just use the the the choice one in the short term but i don't want to use it as a long-term solution like i believe that this long-term solution if it works as advertised which you know i think it will this is the better long-term solution which it is that's why we always say these kind of other chains are flashes in the pan they're stop gaps they are not something that we believe is going to work in the long run uh for multiple reasons so and there's a coincidence as to why they always show up during bull markets yeah exactly yeah exactly so you know on that point like

if we can build something you know as decentralized and as secure as ethereum and scale it at the same time you know via layer 2 and still violate one with sharding too i'm just in a different way then why shouldn't we build that right why should we give up why should we give up on that dream of building this system and that's something that's that that speaks to the very core of why i will never probably never change my mind on ethereum unless ethereum becomes that i will never switch over from ethereum like that's and if that makes me an eighth maximalist then whatever i don't care but that's the vision i want to see for the future and that's the vision i think you want to see for the future as well yeah ethereum has uh generated some sort of like gravitational pull to suck

in all of the bright minds that that understand this and so like while they're like well there's no reason why there couldn't be another blockchain ecosystem that upholds these values all those people that do uphold those values are building on ethereum right and so this is something in our in our first justin drake uh podcast that we did he kind of said like ethereum has a monopoly on economic in researchers and all the cryptographers like all of the the the cryptographic playground is ethereum and this entire industry is cryptography it's cryptography first and like like you said earlier in the show if it can't be cryptography then it's cryptoeconomics but it's cryptography first if we can do it with cryptography

we should and all the cryptographers play on ethereum and they try and uphold those values because they understand those values to be valid uh and so like i again again call me an ethmaxy i guess but like all the people that have my same values are building on ethereum yeah and it's it's funny because you know the maximalism stuff has also got to do with tribalism right where like you know tribalism i mean has existed since we since humans existed but if you look at modern kind of tribalism i guess you could call it where you know there are there is nationalism right where people are like well my country's better than this country because of x y and z that's a much more complex issue i think than a blockchain to be honest so i'm not gonna delve into that right you know i'm not i'm not gonna delve into the

politics and stuff like that but you know if you if you just look at what happens in real life it's not hard to understand why people have their kind of like the camps and have their tribes right like we are by very uh very nature tribe tribalistic people and to break through that has been incredibly hard right we fought wars over this like come on guys like it's not hard to understand why people are tribal um and then the the grand irony of this as well is that it's hilarious when i see people that are maximalist of other trains calling me an 8th maximalist because they're like well you know it's just the grand irony of it because like people of these other changes like well my chain's going to be better than eight it's going to kill eight it's like okay well then why aren't you just like

a x-chain maximalist right like why am i eating max if you're not embracing your chain but you're not a at this chain maximus for not embracing ethereum so from that point of view it's just hilarious that the irony there and i don't know if people can actually see that where it's just like you have fallen into the same thing that you think you're accusing me of doing and this happens with with um you know nation states and stuff as well where people are like well you're like this country maximalist they don't say maximum but like you you know you're a nationalist for this country and then other people say well you're a nationalist for this country it's like okay well you're both nationalists for your own countries like that doesn't solve anything right now everyone gets to be a nationalist yeah exactly everyone thinks their

country is the best right everyone thinks that like they're changed like it doesn't work like that right there's there's new ones uh there and there's there's politics there but you know i i the reason why i don't consider myself an eighth maximal is because i i simply i i understand these things exist i understand you know they have certain tech that i understand some of them might have tech that's really good but at the end of the day i don't have the like the the bandwidth to pay attention to all this stuff and you don't even have the i don't know pay attention to ethereum yeah exactly so like from that point of view it's like why would i spend my time on something that you know doesn't share the same values as ethereum and also would take all away my time from ethereum like i want to work

on film i want that vision to play out i'm doing my best to make it play out so i mean yeah i guess like there's so much nuance here that gets lost in the in the in the stupid twitter wars that happen all the time right to me a maximalist is actually someone who just thinks everything else is a scam and that that actually applies to the bitcoin max because they think that i mean you know what it's funny they're investing everything else yeah yeah yeah but like i say that i think everything else is a scam but really i mean they have some of the blessed coins like you know some of them accept litecoin and accept like uh grin or whatever it was um but but still like the core the core definition of maximalism was that they thought like you know everything else

was a scam and everything would be built on bitcoin eventually um and that's not what i view i just view that ethereum is such a good system that i do believe the majority of the market share will remain on ethereum and ethereum will be the economic powerhouse of this whole kind of system anthony are you able to share a screen by chance uh what am i sharing uh eath price p i'm i'm i'm pivoting the the conversation to eat price i mean i can uh yeah i can probably share it one sec i just have to make sure i don't accidentally share something i don't want to share because i do have uh i do have eth 10k in the title of this youtube video so i don't want to rug pull all of our listeners who are who are waiting for us to talk

about the specific date at which eath arrives at ten thousand dollars which i know yeah yeah yeah man i have the date i have the exact bet i'm just hiding it from iran like just making sure that our infrastructure for those those following our infrastructure on this live stream is not yet complete there's a number of like links and stuff that we would talk about that uh i would totally show on screen if i was more prepared uh meanwhile during this interlude uh go follow uh daley guy on youtube here is the link in the in the chat and that's anthony's youtube channel where he does daily news updates and also while you're here like the video and subscribe to bankless give us your commentary on the news

please like this this is the daily chart maybe i should change like the four hour because it's like you know you can see stuff better i mean i'm not a technical analyst an analyst um by any means but i think what everyone was looking at was this like head and shoulders pattern that was playing out right um you know you could see like going up a shoulder here having the head and then going back down but i mean it's been a bit positive today where we've actually trended back up yeah we've done bounce right yeah yeah and i think we've invalidated this this head and shoulders now i mean at least you know pretty much at this point like it could maybe still go back down but yeah i don't know i it's hard for me to kind of like say

that like i'm feeling bullish because i'm always feeling bullied even when we were crashing to like 1300 the other day i was just like i gotta buy some more eight this is like a bargain price right now but i mean this is just like what the journey to 10k is right like it's also going to be a straight line up um you know remember but you can i mean if you zoom out to the weak chart it kind of looks like a straight line up it does look like a straight line up like this is from from march like you just look at that i mean it's just like only up and we've just now had like some prolonged sideways um damn it's been so long since we've had two red weeks in a row damn it the last time was in the middle in the middle two

weeks of september whole yeah yeah exactly and then before that was just like we're down here in june where you know the price of eight was still like in the 200s so you know i i always like to zoom out and then if you even zoom out on like the monthly chart look at that oh god it's just like straight up yeah like it's it's it's just funny um you know whenever you look at the price like depending on on what kind of like candles you zoom out to you get a completely different view of the market because if i zoom into like the five minute chart right right and i zoom oh yeah like the five minute chart that i have on my computer screen like persistently that's yeah exactly the five minute chart like i mean it is trending up over the last

couple of times but like look at that right you might think this is like the biggest crash ever but really it's gone from like 1740 to like 40. it's not like a a massive thing and then it's just gone back up but i i mean i i typically look at the four hour and the daily um that's that's my pervert go back to the one month because yeah the one month just what's the largest green candle on the one month green candle that ethereum's ever painted oh you're in log scale aren't you yes but like okay i can kind of i and this this is this is it goes back to 2016. it doesn't go back i mean i can do it usd for like kraken which has the longest um thing here but i guess the biggest was like there was some in 2016 leading up

to you know i think like yeah but but that's just because it was playing around in pennies do it in linear scale yeah yeah okay it was two months ago naturally that makes yeah yeah i mean i always tend to look at log but yeah linear like i mean this was the this is the thing that we saw right when we when we had that like teleport from like 713 up to like bloody 14 what 74 right like a hundred percent gain in like a month all of the ethereum people were just felt it coming you could just feel it in the air yeah yeah so i mean but yeah looking at the linear scales it's even more hilarious um like looking at the monthly charts here and just seeing like since you know i guess since like even september it's just been look every

single candle on the monthly is green like six in a row and we haven't ever had that in ethereum's history i don't think unless uh we did back in 2017 right but it was like i mean if you put it back in log it'll be yeah exactly what you were just pointing to it looks like a straight up parabola and then it and then that was the very beginning of 2017. yeah yeah exactly so yeah we've only had this once in each history in in kind of like you know 2017 here you know what i what i always like to look at actually is like bitcoins um you know old-time chart and then look at like the yearly chart look at that like the bear markets bear markets for bitcoin are only two red candles wow

i have never seen that before that's crazy so if you if everyone is wondering why there's like the meme of only up right this is the reason because like if you zoom out long enough right it has been only up for a long time um and it looks very similar you know it is actually hilarious on the on the yearly chart because this candle is like the 2019 candle right that that for those who were around in 2019 in in ethereum it was not a fun year right because the price opened the price opened at like 130 and like close at like 133 or something um for the whole year but in that now for those who don't know how candles work the body of the candle the bottom is like the open the top is like the clothes and

then the wicks are like prices that the the now that he went to but didn't close that so you know you can look at like eight went to as high as like 360 during 2019 but then it finished the year at 133 so and and in that time bitcoin was was double what it what it started 2019 on that was a brutal year for for ethereums i think um totally like uh not not fun but like yeah the bitcoin chart you were just looking at we were just saying it only had two red uh one-year candles and ethereum has two red one-year candles and so just imagine just being in the ethereum community during during that period of time like the whole entire community just contracted down to just like the most core believers and that

was just all of us just like sitting around the bear market campfire just waiting for the life to come back yeah exactly i mean this was truly the brutal most brutal time um you know d5 was like super niche i mean i joined set in like mid 2019 and that was like a big risk at the time because d5 was not a sure thing it was very very niche um but then we had an absolutely amazing 2020 after that right right yes we went down to like not uh like what ninety dollars because of the covert dump but then we finished the year at like 751 dollars yeah it was a good year yeah yeah and it started in august or not in march it didn't even start in in january the bullishness didn't it didn't

start until march and you know it's funny if we actually draw some lines here look at how perfectly this all lines up on like both kind of things here like like just specifically this part right like it just perfectly lines up and then we've broken out of this like box here right which means we're obviously setting you all-time highs but yeah i mean i don't know man like i always zoom man this is this is why i can be bullish on each always is because if you just zoom out especially on bitcoin um this industry just like trends up and maybe this won't be the case forever but because we're in like the adoption phase of this sort of stuff it's just like going up a lot of the time and that's not investment advice but man like i always say to people if you're investing in this space just take

the long term view like if you're a trader you can you can do short term but i mean that's not that's not fun right that's just like full of stress and anxiety and you're probably going to lose more than you win so invest long term in eth in other things that you like in you know even in bitcoin i don't care if you hold bitcoin i mean i don't know bitcoin but i understand why people do um but yeah i mean that's that's kind of like what i say to people in general and i definitely felt like the sentiment shift in the last like week or so it's like oh man like is this you know bear ptsd came back it's like oh is is this over like is are we calling it is this the top like nft top like people selling 69 million dollars worth of eats like

blah blah blah and i remember like i remember you even talking about just you know being cautious because like at some point sentiment can just turn on a dime but also you know if you were looking at the five-minute charts which i look at on a day-to-day basis i have the five-minute chart like just like looking at me right here like yeah my emotions are just gonna be following what that five minute green candle does like oh let me let me look at this chart to my right here oh is it is the last five minutes red or green because that'll dictate my emotions and like something yesterday i was feeling bearish and today we go from uh from uh 15 80 east to almost 1700 eth i'm like oh now i'm bullish again like hooray we're back yeah yeah i mean i i watched the

five-minute charts for a while too just like i had it up there i had to change i put i just put it on the four hour because i i was like you yeah like just it's amazing like when you just have that staring at you in the face how your emotions are dictated by it i'm not a traitor so there was no point me looking at that um you know obviously only a long-term investor in everything that i buy um so yeah i mean and the coolest thing about d5 i know that we're coming up on time here but the coolest thing about d5 is that you can be a long-term investor but you can also make yield on that with all the yield farming stuff right so you don't necessarily have to be like okay i'm just going to buy and hold you can

be active you can just be you can be just as active as a trader would be except you can take on different kinds of risk and and essentially much less risk if you're just farming stable coins then if you were to just do like trading and leverage trading um but yeah i think that's just like an important point to keep in mind as well yeah people people get used to like these massive price movements and so when when things are flat or even down like the outside emotional reach is just you know completely outside but like you said like this is a long-term game and if you are trying to to play that game perhaps while you are waiting for that one year green candle to finally grow get that yield and defy uh anthony this was a great friday live stream or friday night

saturday morning live stream number two uh everyone who is in the youtube right now uh mark your calendars for the friday live stream saturday morning live stream coming a week from right now uh and once again here is anthony's daily great youtube channel where he goes and talks about stuff like this every single day so go ahead and follow that and also like the video subscribe to bankless and uh thank you everyone for tuning in to the friday live stream yes thanks every