Crypto Markets at a Crossroads: What Happens Next?

Transcript

bangas Nation it is the first week of September it is time for the bankless weekly rollup this is back to school edition on bankless uh kids are back to school so I feel like uh we should be getting back to school back to work Summer's over prices can go up all these things oh my God as somebody who doesn't have kids thank you for reminding me that that kids go back to school every now and then all right what are we covering this week Ryan uh we got uh number one Trump St defi project is it a grift or is it the most exciting thing to happen to crypto yet we don't know first the SEC comes for UNIS swap now it's the cftc's turn to go at Unis swap what is going on what did Unis swap do if anything at all will cover all that

news and Brazil Banning Twitter some big moves in the world of authoritarianism versus Freedom we're going to get some takes on that also uh the markets are pretty important to talk about the markets aren't feeling good right now so the big question is fouryear cycle dead yeah uh some investors think the fouryear cycle is dead David so I want to bring you into that and also I've got three takes on why crypto performance price performance is so lackluster three original not original you know borrowed but I think good Cur curated by Sean Adams all right poly Market was added to the Bloomberg teral we're talking about that and also coinbase is working to bank the robots the first ever AI to AI transaction using crypto rail a lot of

big stuff happened this week so we're going to talk about all that and more but first a message from our friends and sponsors over at kelp who want to save you time with their brand new product gain so you can Farm all the air drops possible just using the gain Vault gain will do it for you you can deposit eth RS eth or other LSS and get access to rewards from multiple layer 2 networks reaking platforms or other defi opportunities with just a single click so you can stop doing all that farming yourself and just use the kelp Dow gain Vault to do that for you there is a link in the show notes to get you can withdraw as well at any time as non-committal all right let's get to the market this week David uh I'm feeling like we have a down week is that right

what are the charts telling Bitcoin yeah it's hard to have an up week when on Monday the Trad markets just got clobbered by some just like kind of bearish macro news something about the jobs we don't have that in the agenda this week but as a result uh crypto Market's also not doing so great either Bitcoin started the week at $660,000 down 6.2% this week currently at 56,600 uh so remember okay Ryan last week we did this whole segment about how October was the most bullish SE month for Bitcoin like historically it's it's the month that Bitcoin goes up the October what month is it right now it's not October I know that and uh we start actually September y so it it is actually September happens to be the

most bearish month for Bitcoin in the same way that October is the most bullish so September is on average apparently the most bearish month uh so I don't know why we did that segment last week uh but since this month is September uh this is apparently allegedly the most uh bearish month that uh is has oh yeah I mean our our message was like basically just you know don't look at prices for September and come back in October and that remains true so I'm look at that's column for September this is all the way bitcoin price all the way back to uh 2011 and the RO the most red on the monthly it's got the most month is uh very much September the most blue is octo well actually blue yeah October is a pretty good month pretty that makes sense that that the

worst and best months are back to back with each other because then like October is just like the bounce back out of the sep dump yeah so I don't know I I I thought September would be better but um not starting out PR it's kind of funny that the first day the first Monday of September that the Market's open just everything just crashes uh again in the Trad markets and then it carries over spills over into the crypto markets ether start of the week $2,530 down 7% currently at $2,390 lost $150 on the week about also the ethereum ETF flows Ryan looking pretty abysmal not great uh the ETF the outflows the net outflows every day has been somewhere in the single two double digits for the the month of August there was one double- digit outflows on the 26

where we lost $ 13 million in total a the first two days of trading on in September the 3rd of September negative 47 million and then the 4th of September negative 37 million so over $75 million of outflows in the first two trading days of September uh as bad as it gets well actually so before we get too depressed uh if you look at these numbers the vast majority in fact almost all of it U more than all both cases on September the 3rd and September the 4th were actually from ethe which is nice oh yeah right it's just like so for some reason eth just had just two big days uh and then yesterday man yesterday there has been some 3 million of the 40 million outflows went back into the

grace eth which has the lowest fees but 0 million 0 million went into all of the other ones Black Rock didn't get anything Fidelity didn't get anything no inflows yeah so but basically everything else the inflows are kind of flat but eth continues to drain that's kind of the story that has exactly it's Bleak but it's just like not worst case scenario Bleak there are some Diamond HS on the institutional side Black Rock was outflowing that would be a different story that that would be worst case scenario that hasn't happened yet well wait wait for later in September maybe for that to happen oh God could always get worse before they get better uh the total crypto market caps where are we at in the week $22.07 trillion do Hanging On by our fingernails above $2 trillion all right here's the big question you know how

crypto has traditionally gone in these four year Cycles right so the bull market and then we have the bust all in one like nice four-year unit and then we kind of repeat we've done this a few times in crypto like you know three times at least um you like uh some are calling this like the fourth cycle but the 4-year cycle is dead According to some investors this is a report from outlier Ventures and let me lay out the case for you here and get your response to this basically the fact that following the 2024 happening uh Bitcoin experienced the worst price performance uh more than 125 days after the the event so the price is now is The Happening happened in April right it's

April uh I believe the price is now down 8% compared to previous Cycles last time last few times this has happened we had a 22% increase so 8% down compared to 22% uh up traditionally and the report continues we believe that 2016 was the last time the havening had a significant fundamental impact on bitcoin price action every happening gets more muted in terms of the you know like total percent of Bitcoin Supply so that would kind of make sense and they're they're saying basically 2020 the reason that prices Bitcoin prices went up in 2020 that was kind of just coincidence it was more to do with covid and the liquidity injection than it was to actually do

with with the happing so the conclusion is the argument that the four-year cycle still holds in 2024 but that the Bitcoin ETF approval just pulled for the demand is flawed it's not true this report says uh the Bitcoin ETF approval was demand driven the havening supply uh The Happening is Supply driven anyway basically the report is saying it goes on to kind of like offer some more data point points here the four-year cycle is dead it's not a thing anymore what's your take on this I think that checks out the four-year cycle is and always was going to die uh like you you can't just have algorithmic fouryear price increases like eventually that gets priced in like you know markets are efficient the fact

that like this the claim that the 2020 uh cycle was a coincidence I also also think is very strong which just had this [ __ ] syncratic event called co uh idiosyncratic money printing happened to line up with a four-year hav um and the claim that just like the the reducing Bitcoin inflation is just getting uh becoming a smaller and smaller impact on the market also just checks out so I I believe it that makes sense to me I'm not sure yet personally whether I'm uh ready to abandon the the four-year uh cycle um just because currently being invalidated yeah we're watching it being invalidated right now but it's September David It's always darkest until the dawn um and and by the way it's not because of Bitcoin having Supply it's more kind of the the global macro liquidity that Ral PA Paul talks

about so much right so the the tides of liquidity um EB and flow and that that tends to happen on these fouryear Cycles as well anyway that's I always thought the foure Cycles were supposed to be like internally to the crypto industry that's like what we do I think if explaining it justifying it due to exogenous factors I think also is antagonistic to the idea of like the bit the fouryear Bitcoin Cycles which the rest of the crypto industry follows I mean this is the conclusion of the report it's time for Founders investors trying to time the market to focus on more significant macroeconomic drivers rather than relying on the fouryear cycle they're basically like don't worry about the four years just like go focus on other things that are happening in macro uh David I've got uh three takes for you on the lackluster price

performance I I want to run by you these are like answering the questions of why isn't crypto doing anything in this market now so here's the first one maybe we are in the show me phase of crypto so what's that my base case is still that we get a strong Q4 crypto Rockets 2025 is going to be good similar to you you know you did that episode with Ledger um on kind of like charts and what that looks like and he's like hey this is just uh the Comm before the the big bull market in 2025 um that's still my base case but there is another theory which is we might be in the show me phase of crypto there's a fair chance that we don't get the new inflows the new attention from uh investor we haven't

seen retail Come Aboard this cycle like at all it's all the old uh you know crusty people who've been in crypto for a while from last cycle we're still here I do feel crusty I I feel a little crusty too um but until crypto actually shows the world the new apps it won't actually get the new retail interest and uh like here's here's a data point you know after the dot uh bubble and pop it took Amazon 10 years to reach all-time high after that like 1999 all the way to9 that's Amazon different rules apply for crypto I'm not saying it's 10 years but I am saying there could be this show me phase that the market expects from us

this time around they're like hey we don't believe it anymore you can't get away on the kind of the hype train we actually have to see something so the first possible reason why we've had lackluster performance is maybe we're in the show me face okay that I mean that that I kind of think checks out the DOT bubble like brought awareness about the internet to everyone uh and so like I think that's what happened in 2021 like everyone knows about Bitcoin everyone knows about blockchains yeah like like everyone knows what crypto is now uh it's no longer a m like a lack of awareness and it was also pretty accessible it was pretty accessible yeah so that check out to me okay so that's the first one the other is a f candy take basically crypto

isn't the cool kid anymore okay and this kind of pairs well with uh the first take he he says this another point on why pure narratives won't save us crypto is not the coolest kid on The Tech Block anymore so it needs real products that people use uh this cycle AI is firmly taking the spot as the cool kid on the Block as digital Finance has nothing to do with a digital super intelligent God basically retail and investors they've pivoted to AI you know there was a time where there was kind of a gap you know we we'd gone through our our mobile phone phase we' obviously prior to that gone on the internet we stretched um all the the web 2 type use cases and blockchain was the next narrative big Tech thing well the world has moved to a

different narrative and that's ai ai is getting all the AI is the cool kid on the Block no longer crypto and so that's another reason for lackluster performance also checks out I also think that's right okay and here is a a third take that is um maybe optimistic in a way depends on depends on what happens I I guess post November but uh the poster says from split capital a more unpopular take crypto has never had a product Market fit problem it has only had a regulation problem if regulations were clear and flexible for new products to work at scale financial institutions would integrate directly with onchain uh products the take here is basically like um the other reason for lackluster performance is actually not product

Market fit like we do have the the killer apps The Regulators just won't let us deploy them they won't let us like uh legalize tokenization in a way that brings this to the masses so until we get through that we actually we have the product Market fit but they're just like holding the entire industry back and this probably also think that checks out okay so th those are the three reasons for lackluster performance and all of those check out in your mind yes The Bleak side of this is that all of those are very hard problems like okay in order to get out of the show me phase we need real products in order to get real products we need good regulation uh and good regulation even with a more favorable Administration in

the White House still will take time like we still need Congress to like draft good regulation and pass it so all of this might mean this cycle is going to take a little bit longer I that would be the conclusion here I mean things after November could possibly accelerate things if you had the um regulatory uh Tailwinds in our favor post November maybe you get this faster I think that's going to be important on the regulatory side but to your point takes a while to build things and the builders are doing things in the background I mean there's there's you like poly Market there's great things going on layer 2s um but it'll take a while to build out the kind of the mainstream use cases probably I do really like this last take though where

like crypto never has had a product Market fit problem even though everyone's the memes like we are the users like we do have a product Market fit that's kind of a contrari in take I guess that's why he leaves with it being unpopular but there is this idea that like if this is true which I do kind of think like tokenization super real like Wall Street chomping at the bit in order to like make this work there is this like pent up value that's being created that's not being Express in the tokens because Builders are still building progress is being made by the industry when we finally get the Stars to a line if that takes one year three years five years the longer it takes kind of the more explosive the bull market is as a result of that like once we clear some

of these cloudy skies and then AI is no longer cool and then AI learn learns that it needs crypto and then we also get rid of the regulation problem like all of those things like line up the longer it takes the better that everything will line up is kind of my my hot take here the the question though for people listening is like okay like what should I do and I I think this is Sage advice from uh DC investor he's kind of the the consumate holder archetype he says this look I don't know when we go up I just know that I've held through hell and back and hell and back and hell and back again and again and I simply don't fumble the bag during boring times like this when everyone is getting angry and anxious and thinks it's all over the worst possible time to

Fumble the bag uh and just accept the bleakness because that's what H that's what happens that's the last thing that happens before things go up October is coming guys what do we have coming up David coming up next Trump's brand new defi project uh we know more stuff now uh grift revolution in crypto uh it's definitely unexpected we're going to talk about some of the details and let you decide for yourself and why the hell did Brazil just banned all of Twitter along with some of other products out of the Elon Universe what's all of that about so all end more but first a moment to talk about some of these fantastic sponsors that make this show possible if you want a crypto trading experience backed by worldclass security and award winning support teams then head over to Kraken one of the longest standing and

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page to apply today and if you're not a developer those with staked ctsi can take part in the governance process and vote on whether or not a proposal should be funded make sure you're vote ready by staking your C CSI before the votes open the Trump defi project that uh the the Trump sons have been talking about more more information has been revealed about this there's this mysterious page I have opened up it's called World Liberty financial.com this coming soon World Liberty Financial yeah very uh American and the the tagline is be defiant this has been the the defi project and like it's been unclear so far what this is and it it's not now clear entirely what this is but

I think we have a few more hints a few more detail there was a time a couple of weeks ago where it seemed like maybe this was like a tokenized real estate type project yeah turns out that was wrong yeah it doesn't well tell us what do we know so far David okay apparently there's metadata on the website that says the only crypto platform supported by Donald J trump it will connect users to decentralize fin finance's best tools for secure high yield crypto Investments uh which I think tells us two data points one The Branding is that it's the only crypto platform supported by Donald Trump so branding marketing that to whoever is compelled by by that statement uh and then uh it's a tool to connect uh Finance to secure high yield

crypto Investments uh and so it's talking to like the capitalists in uh Trump's orbits that just really like uh Trump coindesk attained excerpts of a white paper that's apparently not publicly available uh it is built on ethereum it will in include a credit accounting system using a to facilitate decentralized borrowing and lending and will offer a smart account and a brokerage uh so I'm getting kind of like images of something like K's infinix which is a more centralized kind of thin front end that hooks into defi in the back and offers like kind of like wraps up and productized defi as a service and it's really good ux uh because that's

what it's like one role is it's like kind of a a centralized ux log in with email and password uh and then it gets like you know savings and yield and investment opportunities Source straight from defi so it's kind of like white labeling defi if you will that's kind of like the vibe that I'm getting I mean a few things that are positive I suppose right because when you hear kind of trump endorsed and like be defiant and they they use defi you're like is this really defi well it's on ethereum and it looks like it's using a so there's going to be some smart contract platforms obviously uh a is a totally like legit money market protocol so some good indicators here but what about a token what's what's the word on the the world Liberty token why so curious about a

token yeah I'm just wondering uh so reportedly there will be a non-transferable governance token WLFI uh the that eventually I'm assuming will become transferable like why would you ever release a non nontransferable governance token So eventually there's going to be this token WL f i there's this like weird association with doe Finance which is a similar like borrowing lending platform it's like kind of a compound a fork derivative uh which had been hacked for previously by for $2 million although there's currently no indication that the vulnerabilities that uh caused the hack are now part of world Liberty financials Tech stack uh people will be looking at

this thing so we're going to get more details when there's actually more code to be released but four people from do Finance are listed as World Liberty Financial team members Zachary folkman head of operations Chase herrow strategies lead Octavian Lita smart contracts lead and Boga a front-end developer uh who is listed as an author in do finances source code uh so that is the world Liberty Financial team apparently the previous doe Finance team members maybe this was an acquisition yeah that part's unclear but it is clear that some of these are actual solidity smart contract defi Developers it doesn't necessarily bode well that uh do was hacked in the past although D5 protocols get hacked uh coindesk was

reporting you know Zachary folman and Chase hero they've been involved in some other uh projects one one which is notable folkman previously registered a company called Date hotter girls LLC and he posted seminars on YouTube on how to pick up women he's apparently has a history as a a pickup artist so he's guy running operations there okay I guess at some level the question is like why are we talking about this another sort of you know a compound money market like Fork thing we've seen like dozens of these it's because the uh possible next president of the United States is ending protocol has a has a defi protocol it's kind of a big deal there's actually a video for this thing tweeted from the

official uh Trump account on Twitter I'll play this in the background but what is this this is like um clips from him uh glowing up like uh crypto at the Bitcoin conf a promo video with a bunch of different clips of Donald Trump being Donald Trump and then the speech in the background the audio in the background is just excerpt from his Bitcoin 2024 conference speech we talking about Bitcoin talking about crypto yeah saying I want to make uh you know the US the crypto capital of the world so he's like right tying his campaign somehow to this like project uh and and promoting in this way also Eric and Donald Jr will be involved they're the web two uh web 3 ambassadors I should say um Baron Trump has been purported as the the D5 vision behind this so a lot of members the

family involved here D Visionary oh my God one question I was asking is is there anybody we know from crypto here like anybody who's been here you know in previous Cycles uh and one name popped up as an adviser Corey Kaplan is an adviser to this project do do you know much about Corey I don't know much about Corey other than that he I notice him whenever like I'm cruising through Twitter maybe he like likes one of my tweets I'm seeing one of his tweets he's just got like my punk doppelganger uh him and I have the same Punk except mine has a smile and his has a goatee and so I naturally know him because of he got my punk doble G he's he's been around I've seen this guy for like multiple years now and whenever I

would look into this account i' be like oh I I don't actually know this guy personally but like it's just a normal person in crypto doing normal things not grifting I know that like he hasn't grifted anyone that's right and so like been like a normal participant in the crypto crypto Twitter he's actually a founder of a money market platform on arbitrum called doite which I'm not he was on he was on the um uh the flywheel podcast with defi Dave who I consider very trustworthy and legitimate and so the fact that he was on that podcast means that he's like passing some of my passing my sift test all right so some legitimacy here like it this looks like a grift from the way it's kind of like marketed yet we have real smart contract

code it's on are they like what okay so uh safe to say we have no idea what this is also another person that we know Gabe Shapiro who's kind of like a yeah a a crypto legal guy in Twitter he is involved apparently his firm is getting 1.3% of all of the WLFI token in exchange probably compation for Legal Services exactly um and he said that you know not Gabe didn't do this but his co-founder Alex did all of the legal work um and he said I'm fully supportive of it while not knowing much about it and I believe it's likely been a very thorough legal process with am law 50 Law Firm advising so they've checked that box too I mean Gabe is gab's outfit

is a legitimate uh crypto legal company um and the the question I think people are wondering based on this limited information what is this is this a good thing is this just a grift uh and I guess there's maybe two takes here so the most charitable explanation of this and possibility I think is again from Lex node Gabe Shapiro who said my personal guest and I hope it's presented accordingly is that this is similar to the Trump nft thing it's a way for Trump supporters to Signal their support and learn experience a bit about defi at the same time a is real defi it just deposits into a as far as I know that's what Le note so maybe it's just like defi but for Trump supporters yeah hey

do you like Defi and Trump deposit into world world financial World Liberty Financial whatever it's called so that that is uh one possible explanation but there there are some more cynical takes uh as well more on the the gri side this is um Adam Cochran he said you're supportive of it the reskinned of the poorly coded a rapper by a former YouTube pickup artist who had their protocol drained by doing no address validation on user initiated a loop so the hacker could just change the address to their own you support that being promoted by Trump to a lot of clueless people basically saying like this is just a me too protocol by um like you know something that's already been hacked this is a bad idea for Trump

to promote promote this to like a whole bunch of people who are just going to deposit their funds without knowing the risk Nick Carter who is very much in support of Donald Trump's uh candidacy and support of crypto he says I think it generally damages Trump's electoral prospects especially if it gets hacked it'll be the juiciest defi Target ever and it's forked from a protocol that itself has it's also an obvious Target for the SEC at best it's an unnecessary distraction at worst it's a huge embarrassment and source of additional legal trouble um I think what do I think he sees a lot of risk here like this I think there is a lot of risk this is keeping that Donald Trump is doing this flying in the face of the SEC like what do you think Gary gendler is thinking

about Donald Trump like does the non-transferable part of the token is that going to stop Gary gendler like I don't think so like that has stopped him yeah like why wouldn't he I mean if Trump gets elected Gary's job is gone anyway if he doesn't get elected then Gary's coming after him but so are a lot of people Gary versus Trump that I want I want that I want want that this to me this is a surface area for a lot of potential risk imagine the most the two most litigious people going after each other I mean Nick Carter is going further he's like is there something that we as crypto Twitter can collectively do to stop the launch of world Liberty coin like this is keeping

Nick up at night he he doesn't want Trump to go here at all because like okay if this turns out to be some sort of a a grift a scheme or a hack I mean imagine North Korea is looking at these uh smart contracts right now and they're looking for holes they're looking to probe this thing if they can North Korea hacking the president of the United States def5 project like there's just so much surface area for risk here and I mean in the past when Alex mashinsky has effed around and SBF has effed around and Doan they've all like done this all of the costs have been socialized to our industry like yeah I shortcuts have cost us a lot are you ready for I I'm ready for to give my official opinion I was

what's your official opinion what's your official I don't think it's a grift you don't think it's a grift I don't think it's a grift I think it's and yeah well it depends on what you mean by grift but like I think that there there's no intent to like pump this token and then run away like I think it's I think it's I kind of I'm closer to Gabe Shapiro's this is like a brand affiliation thing where if people who like want to just s for Trump want to deposit in some Trump's a front end then they can go ahead and do that and and like you know some people buy jpegs of trump and they love them and I'm like I don't know why you do that but I'm not going to stop you it's you so you think it's something like you know how Trump like has Trump Stakes he

Brands them with the Trump logo or whatever and they're just Stakes but because they say Trump he charges a premi it's something like that is Gary ve selling like like little tiny like marker drawings of things that gets you like drinks with Gary ve somewhere for like a $1,000 is that a grift like some people don't like it no one is like feeling harmed by it I think the problem with that is like that's totally fine if you're just doing nft Collectibles you're just buying jpix and such when people are like depositing I thousands of dollars millions of doll but that doesn't make it a grift I don't think that makes it a grift it might make it a very bad idea though it's that's a separate conversation well we'll have to see uh the world Liberty uh Twitter account put out a whole threat on this David rumors

are flying but here's the real story we know the magnitude of what we're building and its potential impact on both crypto and our country especially with the upcoming elections and they're saying we're not taking any chances we're working with top Security Experts in the world and they name them they go through this whole thread uh and I mean there's something here uh we want something here us pegged stable coins to remain the world settlement layer for the next 100 years hard to know I guess we'll have to give it more time we'll find this out weum DNA is when it sees a business opportunity it goes for it and so that's kind of what I see here don't screw it up though please we can't afford another one of these things uh let's just not screwed up we we'll see what happens I mean he he had success

with the Trump nfts I think he gets to take another shot he gets another shot yeah the nfcs haven't done anything wrong they've been totally fine he gets to he gets to go again just a little bit closer to the Sun just a little bit more yeah David uh okay Brazil Banning Twitter I saw this in my feed all weekend like what's going on here okay so Brazil's telecommunications regulator suspended access to Twitter in order to comply with a supreme court order following a months long case related to hate speech and censorship the judge said it will remain suspended in Brazil and until it complies with all related court orders including covering a $3 million fine the judge also freezed star

Link's bank accounts in Brazil's yeah so like really going after musk Twitter refused to comply with legal orders to block accounts accused of spreading fake news and hate messages Twitter claims judge Alexandre de Morales threatened to arrest their legal representatives in Brazil if they do not comply mus shut down all of its Brazil offices because of censorship by the judge but the service has made remain AED available uh okay so then last on last Friday Brazilian Court required Twitter to name a legal representative in Brazil but Twitter didn't do that inside of the deadline musk argued that the Supreme Court justice was trying to enforce unjustified censorship the judge insisted that social media needs hate speech regulations here's a quote from the article this decision implemented in

late August 2024 is part of Brazil's broader effort to combat disinformation and regulate Tech platforms musk criticized the move framing it as censorship and judicial overreach while the court framed it as NE necessary for enforcing Brazilian law and protecting democracy okay so that's kind of the news it's quite it's quite the ju ju position is this censorship and judicial overreach or is this just a sovereign country you know uh of of Brazil protecting their law and protecting democracy right like I I guess everyone's forced into an opinion on this I I I'll say uh one thing that happened as well that is kind of crosses the line for me is um VPN so if you in Brazil you're a Brazilian Citizen and

you're using a VPN to access X there's actually now a a fine for doing this up to $9,000 for users for individuals yeah for individuals so if you're using a VPN uh to kind of like bypass all of the like the the blocks that they have set up the the fee is $900 $9,000 per day for doing this and wait wait so wait you can you you can it's still legal to use a VPN in Brazil you just cannot use a VPN to access x correct which I think is on the path to making sort of VPN for things we don't like uh deao illegal right or like like fined because the list of things that they're blocking could just grow and grow and continue to

grow and obviously yeah and like how do you how do you enforce a VPN block of this like well don't you have to start traing uh TR tracing and tracking how citizens are using vpns who they actually are in order probe territory basically so uh I mean I think we should all just be able to agree that making vpn's like illegal in some form or fashion is like bad if you're doing that that's just like not a good thing but um what one reaction that Brazilians had is actually to switch over to completely open permissionless protocols like blue sky that's the Jack dorsy kind of Twitter thing I believe they announced on Saturday that they had registered 500,000 new users in Brazil over the two

previous alone so it became the number one app in the app store in Brazil so citizens looking to kind of like bypass um this uh Speech censorship I guess my take David current population of 220 million people in Brazil and 500,000 of them signed up for Blue Sky in like one week that's a big move yeah it's not nothing my take on this is um it's concerning again it's kind of like the the the pavl case we were talking about um last week like I don't like where this is going right you arrest paval durov in in France you make a VPN access of of Twitter deao illegal in Brazil we've got um tornado cash developers getting jailed I feel like this honeymoon period

that we've enjoyed on the internet over the last say 20 years uh between governments and the internet where they're like it's Innovation it's job creation it's great for productivity I feel like that's coming to a conclusion in the 2020s like that's over now they're like we want control this stuff is dangerous uh and so if it's not decentralized and if it can be controlled it will be either controlled or it will be killed I think the world is moving that direction and uh it's concerning yeah yeah there's just this consistent like a rock in a hard place by everything like this these days like musk's version of X is not the Bastion of free speech that he touts it to be like the algorithm is just like out of control anyone on Twitter can see it uh does Banning it like does a sovereign

country Banning it mean that's the correct solution like ooh also yikes like n neither of these things are great I agree with your line that banning vpn's is like now that's like objectively a bad thing but like musk versus Brazil like I don't I don't really have like I'm not going to line up behind musk here it's hard it's hard yeah I think there's a lot of these cases that are going to be difficult moving forward sadly this isn't the only topic of hostile governments approaching uh these new technologies uh a this was probably the worst thing that I saw on my timeline this week uh the binance exe executive tan who has been in custody in Nigeria for like 6 months now there was a video of him that surfaced walking around limping on crutches as he was

walking into court demand like commanding that he is innocent and that he cannot be treated like this he's saying I'm not okay this is effed up in the video as a guard as he's like asking for assistance from a guard to go walk into his courtroom uh he's been denied the use of a wheelchair the fact that he needs a crutch or a wheelchair at all is like ridiculous because he was fine when they arrested him so these injuries he sustained has been sustained in Nigeria in custody uh this is a United States citizen this is a binance executive who is a United States citizen T has a a background in anti-money laundering and counterterrorism finance he was he was an official US government official he's

in been in Nigerian prison for six months without due process uh and has not had any support of any of our American governments or officials uh we need to go get this man and bring him back to the States the fact that he has just been left in Nigeria without having any sort of due process being abused in prison for six months and like no one no government official in America is just like caring about this is kind of egregious I mean I I've seen uh you know French Hill uh representative french hill who we had on Bank list he spoken out about this I've seen a handful of um you know Congress Representatives speak out about this the White House been has been completely silent on this and this

is again because of their crypto stance I don't know I don't know right um we need to send people and go get him and bring him back home yeah put him back with his family negotiate hard like I mean we do something yes uh because he is just like he a hostage there's a country is a there's a country that is holding a United States citizen hostage without due process go get him I think that it's safe to say he'd be I mean he's a crypto political prisoner and um yes yeah he's a political prisoner anyway um hopefully things turn around in that situation moving on to more exciting things that are less depressing coming up next the cftc is coming at Unis Swap this week are they the new SEC Unis swap just collecting all the

four-letter agencies badges but also some big releases in ethereum land remember Oiler uler that defi lending protocol that got hacked well it's coming back arbitrum is releasing his much anticipated stylus upgrade what is that going to do for arbitrum poly markets inside of Bloomberg and AIS are using crypto to transact with each other really cool stuff much less depressing so let's go ahead and get into all that stuff but first a moment to talk about some of these fantastic sponsors that make this show possible new projects are coming online to the mantle layer 2 every single week why is this happening maybe it's because mantle has been on the frontier of layer 2 design architecture since it first started building mantle da powered by technology from Igan da maybe it's because users are coming onto the mantle layer 2 to C

capture some of the highest yields available in Defi and to automatically receive the points and tokens being acred by the $3 billion mantle treasury in the mantle reward station maybe it's because the mantle team is one of the most helpful teams to build with giving you grants liquidity support and Venture Partners to help bootstrap your mantal application maybe it's all of these reasons all put together so if you're a Dev and you want to build on one of the best foundations in crypto or you're a user looking to claim some ownership on Mantle's defi apps click the link in the show notes so getting started with mantle the Unis swap extension is here the self- custody wallet created by the most trusted team in defi Unis swap Labs designed to make swapping feel effortless this extension lives in your browser's sidebar letting you swap sign

transactions and send or receive crypto without ever losing your place on the internet plus with human readable transaction messages you'll always know exactly what you're signing navigate a multi-chain world effortlessly with support for 11 chains like ethereum mainnet base arbitrum and optimism no more chain switching or token importing all your assets are right where you need them to be the unop extension is designed to level up your swapping experience with other Unis swap Labs products as well easily on board to the extension using the Unis swap Mobile Wallet to begin managing your assets across platforms and take advantage of smooth seamless synergies with the Unis swap web app so go and download the Unis swap extension today by clicking the link in the show notes just another way Unis swap is helping you swap smarter arbitrum releases stylus all right what

is this David uh okay stylus has been under development by the arbit team for a very long time it enables developing a solidity smart contract TR s in any language so if you're a developer that knows C C++ rust go python JavaScript Ruby cotlin didn't know that that was a programming language you can now become a smart contract developer you don't have to go through solidity you can just use your normal language and uh stylus will collapse everything down into the bite code uh that runs on ethereum so no longer learning solidity so that means yesterday 30,000 developers who knew solidity could build smart contracts now with stylus 15 million as in like all the people who knows all coding languages kind of all of them yeah yeah it's the great thing about wasam is it

supports all of these languages out of the box so if that's been a holdup for some of these developers hey I don't want to learn another language I I just like I love JavaScript or I love python or I love go they can now write smart contracts in those languages this is a really big upgrade David I remember a time when entire layer ones were were built on this premise of like we are like ethereum but we're better because we have WM support and uh can onboard all of the developers over the world whereas you know if you're developing on ethereum you have to learn solidity so now that's come to ethereum which is uh pretty fantastic I don't I don't know anything about like deep programming like this but it seems really hard like you don't have to write solidity you can

just go like compile St to straight to B code with other languages I don't know I don't get it but nice job arbitrum congrats on the release I know you guys have been working on this uh for a long long time now uh I would like to see how this uh works in the wild like does this act actually attract new developers like what are the the big strengths here another big release this week Oiler is back okay so what is Oiler you might recall it as a defi lending protocol has some permissionless features it's sort of like an A or a compound and they can spin up like all sorts of separate tools and uh support other assets but in March 2023 it was hacked I believe this hack was associated with North Korea was like a Lazarus group type of no that that was

everyone's first impression end up being this like freaking kid who was just like like punching way above his weight class who ended up giving all the money back over the month or so because it was a lot of money it was like $200 million something like that $200 million yeah and Oiler just did a fantastic bang up job recovering all the money like contacting FBI they totally figured out who the exploiter was it was it was I I can't remember if it was like a high schooler some really young guy uh who just got totally outplayed by Oiler and then they were able managed to recapture re uh give all the money back there was this huge like distribution process where like victims of the oiler hack were able to get their their money sent back to them uh but it also just like

caused a really big stain on Oiler the system because they got hacked it was a permissionless like immutable Code system that if it gets hacked it's like pretty catastrophic because it's not like a or compound which are governance-based lending markets this one has always been built as governance minimized governance reduced uh and so like hands off no oracles very very bakeless uh and but also very fragile and so um they have been heads down building V2 for ever since then I mean cuz usually after a hack like that you you'd throw in the towel it'd be over but like you know Michael Bentley uh he put a blog post uh about this of how difficult it was I I read through that and he he he had just had his first K when it got hacked uh absolutely

terrible but they're back and they have a pretty major release this is a V2 of the so what does V2 do uh okay so V1 was just a similar lending protocol similar to compound in a but just with different risk parameters in V2 they're calling it a meta lending protocol it enables Builders to create highly customized borrowing and lending vaults uh it also opens up the use cases for onchain credit and eliminates fragmentation and capital inefficiencies related to isolating lending market so I'm going to call this uh similar to morpo uh a newer borrowing and lending application on this on the scene with a different backend construction to kind of maximiz Roi and minimize risk uh but also really leaning into the same thing that Mar for is also leaning into which is governance

minimization uh a has kind of dominated the centralized liquidity uh model of a the centralized pool so like all pools everything is kind of pulled together in a uh more fo is really segregated accounts Oilers a little bit in the middle uh but also really leaning into just as little governance is possible so some benefits that Oiler claims for its users you can choose between risk isolated Lending pairs or cross collateralized Vault clusters which is where it's similar but also different than a you can opt into passive lending or fixed parameter vaults and manage your own risk vaults can support erc20 tokens real world assets synthetic assets or even nfts it's totally open uh and some other cool bells and whistles as well uh tons of audits as you could

imagine 31 audits 31 audits wow I hope that's enough and then there uh is a $1.25 million audit competition that completed and a 3.5 million captur the flag with has Finance so they just audited the [ __ ] out of this thing uh there's also a bug Bounty program as well so honestly Michael Bentley and all of the oiler team who kind of went through hell to like live through Oiler V1 uh its exploit and then Oiler V2 and then bring it bring Oiler back and deliver with V2 over just like however long it's been over a year and a half now that is some that's some of the biggest Grit have ever seen in crypto yeah welcome back

that is impressive well done guys yeah I hope you guys feel really really good uh brand brand new type of protocol I know like V1 we've seen a little bit of V1 and V1 was adoption was doing really well in 2022 and even into into 2023 uh and so like adoption was growing before like hey the hack came and then 20 we all know how 2023 went so really hard Market uh and so I'm kind of I'm looking forward to seeing how well Oiler V2 can compete in the market a is this gargantuan more is also pretty damn big now uh what can Oiler do in this market with this brand new construction I am curious David you pointed out that Celestia has released their product road map uh as well anything notable here uh I'll call I call it a technical road map

the way that they have it constructed is very similar to the way like vitalic illustrates the ethereum road map so pols little more polished they have vitalic drew him his himself I think Celestia has a uh some uh designer with him uh so three three main tracks that they have categorized theirs abundant block space verifiable block space and frictionless block space uh there's a link in the show not if you want to see Celestia's technical row map uh I hope somebody does an episode about that maybe it's us kind of a cool box to check here too um Bloomberg the Bloomberg terminal you see it you ever had access to one of these Bloomberg terminals no every time I I only only see it through screenshots so old right looks like something old but it is like legendary I mean this is still a

financial service that um you know it's hundreds of thousands of financial professionals subscrib to is what is a terminal it's from the ' 80s dude it's got all the financial information anyway now that now that we've uh denigrated it um they've added poly Market to the terminal so uh if you want to search for Trump versus Harr Harris and the prediction markets there or uh any any Market that poly Market has is now integrated into Bloomberg so it's just kind of a cool box check this is Shane founder of poly Market saying the Bloomberg terminal has now integrated poly Market entering mainstream news in finance before our eyes what was once a fringe sci-fi idea for transforming the

flow of information is now becoming the new normal as tens of millions of people have it around relying on polym Market forecast as a source of truth I think this is actually true because once it gets in Bloomberg terminal there there's nothing like more Blue Chip Finance than getting there right and so all the financial analysts will start referring to the poly Market very legitimizing yeah uh very cool um I wonder how strong of a top of funnel that'll be for poly Market I I don't know it you know it'll be great for the it'll be great for the propagation side of the information that prediction markets are are putting out though um dude let let's get to the cftc thing so I saw this uh like tweet in the story originally I was like what is

going on so there's something going on it's not as bad as it first sounds so the cftc has apparently charged Unis swap with illegal derivative trading what what is this okay so uh the way I think this works pretty sure is that inside of the unop front end you could go buy a leveraged token so the unisoft frontend listed and showed a leveraged token so users of unisoft could go by that from the unisoft front end that unisoft Labs controlled as a result of that that that an example of this David would be like if I wanted to do like a 2X eth or something like that 2x long 2x fli eth yeah yeah there many of these like lever tokens where like Leverage built into the token yeah and you can go buy one of those on Unis Swap

and uniswap Labs didn't remove those from the front end because why would they uh and the cftc has said well now you guys are offering leverage trading to us retail investors Unis swop Labs just agreed to settle for a whopping $175,000 by whopping I'm being factious that's very small uh and this is uh specifically in a no admit no deny settlement so I thinking they're saying in this settlement they're not like accepting like fault they're not like this is not a guilty plea uh they're just settling for $175,000 to make this thing go away I got it yeah I think a concern here is like what what's going on is the cftc becoming a bit more like the SEC where this is just an enforcement action right it was not

necessarily like a warning there's no kind of like a comment period or anything it's just going straight to enforcement and this is the cftc's director Ian McGinley saying the cftc's enforcement division will vigorously enforce the ca as digital asset platforms and defi ecosystems evolve defi operators must be vigilant to ensure that transactions comply with the law there were some dissenters though David a couple of Commissioners who actually said that this was not this enforcement was not a good idea not in the best interest of the cftc so commissioner summer meringer said it was my hope that one day soon the commission would consider rule making or very least guidance making clear how defi protocols could comply with them Unfortunately

today is not this this that day he's basically saying we should cooperate provide guidance rather than doing this um enforcement action Caroline fam is another cftc commissioner she also dissented she said it was a violation of the administrative procedure act for the commission to establish that sweeping interpretations in administrative settlement orders rather than engage in notice and comment rulemaking notice and comment is where you say hey here's what we're thinking here are the rules uh industry can comment on it the public can comment it they didn't do that went straight to enforcement so she said I'm puzzled how we can charge the respondent that is unis swap based upon no evidence beyond the word leverage appearing in the names of these tokens so it seems like some some at the cftc are taking a

chapter out of the Gary Gensler Playbook all right coming into the last and perhaps the coolest news of the day of the week uh the coinbase developer program platform excuse me updated their MPC wallets to enable llm or AI models to conduct payments so this is an article that was released by Brian Armstrong on Twitter and it starts this week this week at coinbase Dev we witnessed our first AI to aai crypto Transaction what did one AI buy from another tokens apparently not crypto tokens but AI tokens uh this is a what do you call it's like a double on Tandra kind of a pun or something um tokens are like this thing in llm models that are like how like llms work I'm I yeah it's just the fact that we use tokens in the

crypto world it's like also kind of funny so Brian arram in his article says AI agents cannot get bank accounts but they can get crypto wallets and they can use USC on base to transact with humans merchants or other AIS those transactions are instant Global and free this is an important step to getting AIS to get useful work done he says and so Brian is saying like hey there's like frictions AI can't use stripe they don't have credit cards they don't have bank accounts but smart contracts ethereum blockchains speak the same language as AI which is code and since they're per Mission lless then AIS have all the tools that they need to pay for the services of other llms I use chat gbt I pay for it it's a great service uh but

AIS cannot do the same and so Brian is saying look we just had this one AI but pay for the services of another AI using usdc on base and I think this opens up you just use your imaginations imagining all these AI agents who are providing value to us humans start to provide value to other AIS and all of a sudden we can get this AI economy growing yeah I mean it's entirely possible that ethereum turns out it starts it's bootstrap by humans but it turns into like a um a property rights system for the machines I totally see AI agents can't walk into a like Wells Fargo and get a bank account they don't have a citizenship they like it's just not it's not set up for them right but programmable smart contracts and programmable um basically smart contract

based accounts are effectively what they will use to bank and communicate and exchange with one another right and a lot of this will be bot tobot agent to agent kind of driven in the future in fact this was like uh a thesis that you know seems pretty obvious and is going to play out and this was originally what you and I wanted to talk to owski about do you remember that this was like our agenda we were like okay Co before he sent us on a three month detour yeah we were like hey El eer like going to that yeah uh you're very familiar with AI you can tell us about the latest and the greatest and we've just built this thing in crypto we think it's going to be a great digital property rights system for maches a are going to love it and

then about 5 minutes into that conversation uh we realize that he actually are going to come destroy us and like we you know it's not a good thing from his perspective that from his like this is bad they're they're colluding to take over the humans yeah yeah he's like made me feel sort of sheepish like oops uh maybe we just created a financial system for you know that wants to destroy um anyway hopefully in it'll be sick hopefully that doesn't happen so we end with the meme of the week David what we looking at okay so this is my meme uh my mom just text me out of the blue this article from some website financial riew

and the title is crypto owners are more likely to have Psychopathic traits study says and then her comment to that is just ha haa that's all she sends me did did did you read this study by the way no I did not read that study it's a real study I actually read the um uh the study itself it was like a NIH funded Grant to study this oh it's actually like a well done study yeah well I mean well done is I guess subjetive subjective somewhat but they go through like the mellian you dark Triad personality traits and they're like oh yeah you know crypto holders have a lot of these and they're predominantly male and they go through a whole psych um analysis they they get their news from

non-mainstream sources and all of these things you know not necessarily uh uncomplimentary aside from this one you know the McKellan traits and the psychopathic traits but it's a it's a real study that your mom is seeing in mainstream news here so for context my mom is a forensic psychologist so she knows extremely well just the world of stats and studies around psychology related subject too yeah yeah yeah yeah she goes to court and [ __ ] oh wow well you should like you should send her the actual like get her to read the actual study and give her I'm sure she did she didn't just send me the headline I'm sure she read that was there any back and forth or just like no I did not respond to this I did not

respond to this she thinks you're a psychopath now I was wondering it's in the back of her mind David all right let's close this out we're going to get to riss and disclaimers in a moment but uh if you are watching on YouTube there is or even on Spotify there's something there's a QR code somewhere here that you can go uh scan and get access to the bankless premium feed we call this the the citizen feed and we publish a lot of extra material on there it's like bonus content are debriefs after the episode um it's fantastic it's no ads by the way so if you are if you've gotten to this point in the rollup I know you are a dedicated Bank list listener and if you're hearing this you you're not yet on the bank list premium feed there's opportunity to go get that and do that I

think we have Spotify 10 fun feed it's the it's the better feed Spotify 10 is a discount code where you can get 10% off that and uh you scan the QR code to make that happen all right we'll end with this of course you know crypto is risky you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot