Friday Night @trustlessstate and @sassal0x Livestream! $ETH is ultra sound money

Transcript

youtube people are going to be like what the [ __ ] is going on where is it okay cool got 20 people in periscope one person on the youtube what's up people we're live all right we're live what's up anthony hey hey hey how you doing good man good man how are you pretty good uh friday evening in the states saturday morning in australia and uh we're live streaming because we can

yeah yeah and we're we're bullish on eighth we're very very very bullish on eight oh as if it needs to be said yeah yeah i mean eat his bull podcast or live stream i mean i mean yeah you've been pushing you know the atheist ultrasound money all week and you know i was i was uh kind of yeah very very hard and i was kind of talking about it as well i'm just like yeah yeah i'm bullish like i'm more bullish than i was before and i didn't know how that was possible but i think i mean i listened to the to the justin drake podcast as well and um you know i was like this this is this is amazing like this is incredible i mean more people need to know about this so yeah i mean it's just cool yeah that's what's so awesome about justin drake is

like a he's a cryptographic cryptoeconomic researcher which like how many of those are there less than 10 perhaps but then also he's taking that knowledge which again there's only like you know i don't know ten ish people that know this stuff but then he's also taking it all the way to the other end of the spectrum which is memeing it so there's one side of the spectrum which is building cryptoeconomic crazy stuff which is extremely hard and complex and requires extremely esoteric knowledge and then to go to the other end of the spectrum which is like distilling all of that cryptographic magic into like three words as a meme is also like a skill in of itself and justin drake is doing like the full spectrum of all of this stuff

it's pretty cool glad we have him on the team that's for sure yeah and i just found it funny because you know i don't think many people kind of like i guess in the wider community would know who he is because he's not like super active on twitter right he usually just pops in to post his ultrasound money meme or or post something about like uh you know he used to he used to be known because he'd put like a date of um of eth2 launching and then it would be a date that no one else really knew about everyone's like dude stop giving stop giving everyone dates for the eighth to launch but yeah i mean it's it's funny how like what he does there's just not many people that are doing it right now and i guess that's why it's such an interesting thing to to

kind of research right now just like crypto economics in general because i mean you know when you look at like something like bitcoin you can't really you know look at that because you know what bitcoin is you know it's going to stay that way and the community wants it to stay that way it's monetary policy right you can study it and you can see how it works you can do things like i guess stock to flow right that's very popular in that community but with ethereum right we're we're kind of like still kind of i guess i wouldn't say we're we're actively trying to like design a monetary policy because i think we've gone to a nice spot and that's where like basically where the ultrasound money meme comes from but you know i think justin's research just backs up all the all the stuff that we've kind of

looked into basically saying that you know perpetual block issuance you know without a hard cap works when you have fee burn like it works very well and can potentially lead to deflationary supply which is that ultrasound money so it's really cool to see actual research you know um from from you know someone who studies this stuff for a living go into it and kind of come to the same conclusions yeah yeah you said uh that issuance works when there's fee burn and i i think there's a case to be made that like issuance works without fee burn as well and because this is the model that we have in like the nation state model where we just issue and then we get we want and that works under a paradigm where the economic power the gdp of the economy is growing

faster than issuance then and that's when we don't get inflation right because the inflate the issuance gets sucked up by the economy which is growing and so it's permissible under those paradigms but what doesn't work is when like humans are at the helm like issuing this currency like we tend to [ __ ] it up we tend to issue too much there's interest behind where and how we issue and all of that that all that [ __ ] with just the model of just like oh yeah we can issue for security when we turn that into a protocol and have the protocol issue as what's needed that takes out that human element and that's to me what makes it sound money is that ether is issued dependably regardless of the size of the economy so the size of

the ethereum economy is allowed to grow and not necessarily take ether the supply of ether with it it'll take the value of ether with it not the supply of ether with it unlike the us economy but where ether becomes ultrasound money is what you were saying with the fee burn it's like well the size of the ethereum economy is allowed to grow which then the value of ether tracks that growth rather than the supply of ether tracking that growth and that sound money and then ultra sound money happens when we are actually reducing ether supply as a function of growth that's where to me like that super soundness comes into play or ultra soundness comes into play

yeah i mean for sure and you know i think i saw a bit of pushback about like the ultrasound money me when people saying you know if aid's supposed to be kind of like money why are we burning it right why are we why are we kind of like um get you know deleting it out of existence essentially and kind of i kind of like uh i guess hit back on that a little bit and say you know while eighth is being used as money within the ethereum economy for for a number of different things especially within nfts it's like pretty much like on the bottom of the list for the things that eat is good for i i mean the the top three things i think it is good for is its uses as to paid fees right and then obviously with the fee burn it makes it

even better um it uses trustless collateral within d5 it's amazing collateral right you don't have to trust anyone because it's it's it's the most trustless asset on ethereum uh and then of course staking right the internet bond as as you guys like to call it uh so you know it's just as money is kind of secondary to all of that right it does bolster it it does help with it and it does help psychologically with people kind of looking at it and being like okay well eight is the unit of account you know and the kind of moe of of the ethereum economy but then we can actually produce these kind of stable assets from eth right you have uh basically uh dye and now you have like reflexer labs with rye you know building something that's pretty much like sci-fi

when i look when i kind of learned about it i was just like this is this is cool right it's not exactly a stable coin but it's stable and it's like it you know it dampens his volatility and all that sort of stuff but um you know from that perspective it's like well we can make better money using this amazing collateral and using this amazing asset to do so which i think is you know incredibly bullish for eath in general even though eth you know potentially probably won't ever be stable because of its deflationary nature that is not a big deal to me i think that's actually a feature not a bug for sure yeah yeah totally and i understand why people are confused when they say like oh yeah we have eath burn and it's this eath burn thing is cool and then people

are like why are we burning money like why aren't we doing something more productive with that money like question mark like why why burn money and like on the surface level it's a very fair question like why would you ever burn the money but like this is where crypto economics is like slightly different and like really warps people's minds then makes people hard to understand when we burn the transaction fees what we're doing is the complete opposite of issuance where like and bitcoiners love to like talk about how when you are issuing new currency you're not adding to the market cap of that currency so like when we when the us dollar mints like uh 1.9 trillion new dollars the total value of all outstanding dollars hasn't grown

it's just been displaced it's been taken from one part and placed and and then redirected to another part and the part that it's been redirected to is in the hands of the government which gets to issue it when we burn money it's the exact opposite it's taking the value and it's displacing it away from the fee that was just paid in eip1559 and it's putting it back into the value of all remaining ether out there and you were saying that like the ether is um the ether as money is actually like the least useful version of money well except for val except for collateral and defy which i count as money that's when ether is collateral and defy that's me i count that as money and if what we are doing is we are

taking transaction fees and burning them which is a necessity we are taking that value and routing it back into the ether as collateral either in people's pockets their wallets or as collateral and defy and so it's actually is extremely productive uh and the net result of this is that ether as a collateral type and maker dao and ave and and all these other applications rye that you that you were just talking about the net result of this is that the the risk mechanics or risk parameters of ether are always has always have tailwinds behind it because ether has this this uh well as you know it's trustless and so it has tail it has a privileged risk parameters

around that but it's also got this uh deflationary mechanism which means that ether is the lowest risk asset and so the eip1559 burning just funnels more value into ether as money in d5 yeah yeah and i mean i think a an analogy to help people kind of understand it better is that like you know whenever you're paying transaction fees i mean i wouldn't call it a tax right or anything like that like it's probably not the best kind of thing to call it but but it's it is definitely a feat right so it's like you you pay fees in real life all the time right outside of crypto for various different things but i think an analogy that can be used that may not be you know totally accurate but it's it's it works is the tax analogy right when you pay tax to

the government you're paying for you know in part for security right because your tax dollars goes towards the military now with ethereum when you pay fees to the network you're paying for for security because of the fact that those go-to miners that are securing the network uh and same with with with stakers in eth2 so from that perspective it's not like we're burning money willy-nilly right it's not like someone's coming to your account and taking money out you know to put put down put deflationary pressure on eth um it's it's definitely only doing it when you know the user makes the transaction it pays the fee right uh and it's taking it from essentially the you know the validators or the miners or whatever and giving it back to the value of eighth right and giving it back to holders essentially of of eighth of which miners

and stakers are right and in a proof of stake model this works even better because you are a defau by default an eth holder like there are some miners who may not even hold eth right they just mine it and sell it but with staking you know you don't have that choice you have to hold your 32 per validator and then if you exit right you're not earning rewards anymore you're not earning the the the kind of the the fees after the fee burn anymore so from that perspective i really i think that it's fine to just burn that that you know a portion of those fees to basically give that value back to each because everyone's aligned in a proof of stake model even in proof of work it's still it still works but it's not as elegant like if it was you know if

ethereum was going to be on proof of work forever we won't go into proof of stake it wouldn't be nearly as elegant as it is when we're in a proof of stake world yeah the combination of burning supply plus minimizing issuance and proof of stake is really where that that synergy takes hold and the other thing i think is elegant about the eip1559 model is i was asking justin drake about what his opinions are about with the percentage of fees that will get burned under eip1559 and he estimated something around between like 50 and 70 percent will be burned and then 50 to 30 percent will be issued as a tip and the reason why that tip uh is so high higher than probably what listeners are are

expecting is because nine he also he also estimated that like roughly 95 of transactions in a block will pay very very very to no tip very low to no tip and it's really that last remaining five percent that is completing uh competing in arbitrage transactions that really jump up the price of uh gas in that one that one block and that actually represents a very large total amount of fees per block and that's what gets burned and the interesting the way that i uh i turn this into a metaphor is that this is ethereum's economic excesses it's because mev transactions aren't necessary for ethereum security they're above and beyond their economic

excesses and that's really where a lot of that fever and extra fee burn comes from and so the elegant the elegant system is that the the security of ethereum only doesn't come from just the bare economic powerhouse of the ethereum economy it comes from the economic excesses of a theory of the ethereum economy which i think is pretty cool yeah yeah i think so as well and yeah on that note as well i think it's it's funny because you know once a narrative takes hold or once like a something takes hold within the community it's hard to change it and i think a lot of the community may uh may think that uh erp 1559 is going to burn like all the fees right when in reality you know there's different estimates from

different people you know anywhere between like 20 and and like 70 or something i've seen as estimates and it's hard to tell until we actually have it in you know in the network um but yeah it definitely doesn't burn like all the fees that's just not how it works um but it it ideally we wanted to burn like as much fee as possible right as much as the fee revenue as possible but even then even if it doesn't burn all the fees you know you can imagine a day where and i put this out on twitter where the network's generating billions of dollars in fees per per day and this isn't paid by individual kind of users right this is paid by layer twos um who will be able to afford to pay that and users will sitting will be sitting at layer two so you can imagine you know

potentially billions of dollars in fees being burned each each day even if it's like not the whole amount of fee revenue that's still a lot um and you know the market cap of 8 right now is only 200 billion dollars you know i i'm gonna assume that if eth got two billions of dollars a fee in fees a day market cap would be a lot higher than 200 billion dollars just because the economic the activity too so yeah yeah yeah yeah um just the economic activity to achieve that would have to be very high but um in general though it would put constant kind of pressure on on you know on eth and also it would be a constant source of demand fee because when you think about it right now yes people buying eth to use as gas is a demand driver but the

problem is is that all that eth goes to miners um as fees right and if they sell it the net result is not an increase in price faith right it's it's it's zero so and i'm not saying that all the miners sell all their they get you know from mining all the time like a lot of them actually stack it and a lot of them have been stacking up eth2 i think as well but yeah it's just not as elegant of a model because you don't know and you can't control what the miners do with it so by burning a bit of it you can have a kind of like um i guess a constant stream of of pressure on on its deflationary pressure which is good for eat overall i mean a rising eighth price is good for many reasons but the core reason why it's really good is that it

adds to the security of the network and makes it even more expensive to attack the network and if we want to resist nation state attacks then each needs to be as expensive as possible we need to make it as difficult as possible in proof-of-stake for people to to um you know control the majority of the stake and you know you just make like super you know super high in market cap and it becomes prohibitively expensive you know if ether is worth like 10 trillion dollars in market cap it cost you like a few trillion dollars you know to get enough stake and then while you're trying to do that you're actually pushing up the the price of eight as well so you know you basically create a network that is i would i'm not gonna say unattackable but like extremely resistant to attack and it would take

you know the instead of buying up ease to stake what they would actually opt for is having to like basically try and get a hold of all the existing validators you know try to hack into and and take over existing validators because and this is why decentralization of validate is is important as well and we don't want all the the stake on one exchange right because if the stakes on like a few exchanges then nation states could compel these exchanges to to do something bad so yeah i mean i just think it's a super elegant model and i just can't wait for i mean we've been talking about it for so long you know we know one five five nine's going in uh in july hopefully like um we know it's approved but july tentatively um and then the merge right once once we get our proof of work uh

hopefully i wouldn't say you know maybe maybe q4 if we're lucky but i think q1 next year is when when that we're targeting for that as well but yeah that's i i just can't wait if becomes ultrasound money at the end of this year if not the very early part of next year you said that uh it's important for eth to be valuable so that it for ethereum can be can protect itself from it from attack like naturally this is you know crypto economic primitives like you you need to understand that to be true but what also what's really cool when ether becomes really valuable is ethereum becomes more resistant to attack but if ethereum if ether is more valuable ethereum as a protocol needs to issue less of it to achieve achieve the same result of

security right and so we can maintain security but if ethereum if either the asset goes up in price we issue less ether to maintain that same level of security and this goes back to rewarding transactors in the ethereum economy and you know the way that monies come and go throughout history is that monies die when they become flooded with supply because there was too much issuance and then monies are born when that value goes from dying currencies into new ones that can hold that value better and then and then the economies of the world just choose to transact on this new money and if ether is holding its value better than all alternative

monies people will discover that as a shelling point and and then with the way the way that like ultrasound money works into this is that once the people of the world in like i don't know four to eight years figure out that this ether thing is designed to always issue the minimum and also burn the most it's going to become the shelling point as the economic unit of the economies because it's the thing that's always going up in price bitcoiners interestingly always say that like btc is designed to pump forever and they're not completely wrong and they could be right but it's just that ether is designed to pump forever more and harder because it's ultrasound

money yeah yeah and it's funny when you when you talk about this stuff about ethan you know a lot of people will make will make fun of us for talking about it like this you know especially bitcoin is because especially um they they believe yeah yeah they believe ethereum is monetary policies just trash and being able to change it is sacrilege and you know obviously the ethereum community doesn't believe that we we like the fact that um we've been flexible and pragmatic about our monetary policy because we think about it you know i'm not going to say bitcoin's monetary policy is bad but it was set in stone from like you know 2009 right when the network launched or at least 2008 when the white paper came out um and then it hasn't changed since and it's worked right it definitely works it makes sense

it appeals to a lot of people but there's there was to me there's just like security issues with that because i mean i've spoken about it before a lot but basically a dwindling block reward um without fees to make up the security loss from that uh to miners because paying to secure yourself with proof of work is a lot more expensive than proof of stake but i just don't think bitcoin can get to a point where it's generating enough fees to cover its security budget and i think ethereum plays a huge part in this as well because when you think about it ethereum is taking away bitcoin's activity because bitcoin um you know bitcoin is coming over to eth to do stuff to do stuff on ethereum whereas you can't really do anything on bitcoin um rather than send bitcoin to each

other and you know maybe that works for a while maybe you know large transactions pay a lot of fees that and everything but i don't know i just feel like the end game and the end state for a lot of btc is just to live on uh ethereum because we've already seen so much come over i think it's over one percent of this yeah exactly exactly so you know whatever's more useful i think in the long run wins out and that's why i've always bet on ethereum and i don't mind that the monetary policy has changed a a few times but now we've got one that's set in stone right now that i don't think a lot of people understand the minimum kind of viable issuance where we only issue what's uh what's uh necessary to secure the network um but you know i don't i just

don't think that's a huge deal and you know anyone who says it's centralized in anything i don't think that's true because um no issuance kind of reductions um and and and increases or anything to do with issues will get through without massive community support you could say that erp 1559 is a monetary policy change because of that fee burn um and if you do believe that then look at how long it took us to get one five five nine into the network it took like two years to do that right and it was the thing that everyone in the community or pretty much everyone like me i won't say everyone but like you know 95 plus yeah if not more than that um wanted in the network right and it took that long i would think that these days besides you know moving into eth2 which is also a

monetary policy change because you're getting rid of proof of work but just in the eth1 context if you were to propose even a block reduction right a block award reduction it would it would take so long to try to get that in if you'd even be able to get that in it's just it's it's so hard because you know the the the community is so large the network's so large right and it's so decentralized at this point so yeah i i kind of push back very hard on people saying that it's centralized and at any moment anyone can change the issuance policy of of eth it's just it's [ __ ] if i'm being honest and i'll push back it's not even short of it's not even short of being dishonest it's just straight up malicious just wrong it's just wrong and and like this and

bitcoiners have done such a good job in baking this wrongness into their culture and say like oh like ether is no different than the fed like they change the ethereum monetary policy as often as the fed does like no ethereum monetary policy has been changed three times first there was five eth issuance per block and then we dropped it down to three and then we dropped it from three to two and then and then i guess you could also count like changes in block times as as like monetary policy but not really uh and then with this introduction of eip1559 this is another one and they're all going in the less and less issuance direction so not only is the the monetary policy of

ethereum trending harder it's also only ha it's only happened three times it's it's crazy and like and the bitcoiners change this metaphor just like you said where they say like oh they'll change it whenever you want then go and do it bitcoiners like if you can change if we can if if humans can change ethereum monetary policy whenever they want why aren't bitcoiners coming into ethereum to try and change the ethereum monetary policy to flood the network with inflation because that's what one attack of a system would do to another if that was the case because that's not the case the only thing they can do is yell about it on twitter yeah and i mean it just goes back to when people are are afraid of something

or perceive something as a threat it's like a fight or flight right and obviously a lot of people choose to fight which is fine i mean we do it as well right if we perceive anything in ethereum as a threat we're going to fight against it and that's that's fine i think that's extremely healthy for the network but when it becomes you know very ugly and not healthy is when there's like lots of misinformation spread no straight up lies essentially like you know i guess you know especially bitcoin maxi is doing what they try to fight against and it's essentially just misleading people um which is funny because if if you look at neural robini and and how he kind of like talks about peter schiff how they talk about bitcoin right that's exactly how bitcoin has talked about ethereum and the irony is hilarious to me uh so looking at that

and kind of like i get the sense that we're on the right path if these if bitcoins are so scared of ethereum and have been for so long now and on of eighth getting any kind of value then for sure and i mean if you look at at each market cap compared to bitcoins i mean if it was truly a [ __ ] coin it wouldn't be worth 20 of bitcoin right it is worth 20 of bitcoin in terms of market cap which is massive considering that bitcoin has all of the attention right all the mainstream attention um it is literally what everyone ever that ever talks about crypto mentions first like i even still mentioned bitcoin first because i just know that people are going to know bitcoin more than more so than ethereum um and also they have all these treasuries kind of buying up btc right

they have lots of early you know um btc buyers who bought up a lot of it and and ether's sitting here we still have like uh uh i guess um you know only a couple of public companies owning earth on their balance sheet we still have the really crappy narrative around the monetary policy from a large part of the community we don't have the mainstream coverage and we're still worth percent of of bitcoin like i i and and and we know we survived a brutal bear market you know when when eighth went to 80 bucks so i don't know i just look at that and and it's it's extremely positive to me that that we're in this position right now because if you told me in 2019 that eighth would be where it is today right especially during the the times when eath was like

you know around 100 150 and it kept trying to break out and it kept getting sold down you know it was just a different time like for those who weren't around back then there was no guarantee that it was ever going above like 200 again right because and then when it did it just got sold back down and it was just it was so brutal i mean during 2019 it was even worse because what ended up happening is that um eighth and bitcoin had like a mini rally in the middle of the year so each one's like 360 or something like that i think bitcoin went higher than a higher i think nine ten thousand dollars yeah something like that so people thought that you know this was it this is the recovery we're done and then we're out of the bear market yeah yeah

yeah exactly and then it wasn't it was a massive bull trap but not only was it a bull trap for bitcoin it was massively more of a bull trap for eight so what ended up happening in 2019 is that eth started the year at like 120 dollars it finished the year at like 125 or something like that it did basically nothing but bitcoin didn't bitcoin doubled on that year so the sentiment for eighth was so bad and i remember early 2020 saying to some friends i had like this thing like guys like at this point if eight doesn't actually wake up here like it's just i mean i wasn't i i mean for the probably for the first time in my life i was kind of bearish at that point i was like i don't know what's wrong is eighth just broken like this is

because it was just it was it was it was just dead compared to bitcoin and then it obviously woke up and you know eve had after the covert dump in march had like an amazing 2020 and then you know it's had a really great 2021 as well um so from that perspective it's just funny to see how far we've come and now that we're basically you know hardening and refining the the monetary policy that we have to drive even more value to each the explosion in defy in the explosion at nfts i mean you guys talk about it on bank list about economic bandwidth you know as its price goes up we have more economic bandwidth to to to pluck from with eth and that's just extremely positive for d5 because 8th locked in d5 is up to like 9.2 million now i think 82

is like 3.7 million um so it just keeps going up because there's just so much demand to use these products and the best collateral to use in these products and the one that most people hold is eth so yeah it's just i mean beautiful bullish kind of like relationship going on now and on that note i mean not investment advice but man each just seems so undervalued right now um compared to compared to bitcoin dude it's it's it's crazy and like this is what the justin drake episode really did for me was really like woke me up to the bare bones primitives of what cryptoeconomics is and so like there's a design space that's that's not bitcoin that's not ethereum that's just purely academically cryptoeconomics and justin drake did it really really

well where he said if you want something to be money money is the thing that people buy and don't sell and so when you when there's an asset and that asset becomes monetized it becomes monetized because people buy it and then they don't sell it and that's how something becomes money it's just that's the shelling point that thing that that and it also takes like the whole rest of the world to also participate in this and then the market cap of said thing goes up and so what you need to do if you want to engineer sci-fi crypto economics is you need to engineer a system that convinces people to buy it and to not sell it and also has some sort of mechanism baked into the system where there's always a buyer

and so what proof of stake is is the mechanism to issue the least amount of cryptocurrency create a lease amount of crypto assets which means that there's the minimum amount of crypto assets possible to be sold and that's proof of stake that's what that is and then there's this other mechanism where well if there's any sort of economic excess we buy it and then and then also by proxy burn it and that's eip1559 and so this is the bold case for ether the asset is that aside from the politics of bitcoin bitcoiners ethereums aside from all that and infighting there is some sort of like neutral design space that makes good crypto economic money and that's what ethereum is that's what

ethereum has tried to become and so that's why we're so bullish and when i see like ether as like one-fifth the size of bitcoin i look at bitcoin and i 10x it and i say that's where ether should be at a on a bad day and it should be on and should be higher than higher than 10x bitcoin on a good day yeah and on that note as well about how uh you know it doesn't matter about the politics it really doesn't because if you're a bitcoin maximalist you can use ethereum and no one's gonna stop you right and no one even needs to know that you're using ethereum and the beautiful thing is that with eip1559 is that you're using ethereum and you're actually adding value to eat the asset because your eat that you're

using as gas is going to is going to be burned so from that perspective it's just like a beautiful kind of like a thing there where even those who absolutely detest ether as an asset they test ethereum right the allure of money is more powerful than that people are going to come over and use the economic um engines of ethereum uh in their protocols that we have and uh to get value even even if they're just doing it on their bitcoin like even if you're just um having like tokenized bitcoin on ethereum and you don't want to touch all these other [ __ ] coins you just want to touch bitcoin well it doesn't matter because you still have to pay fees and eat right you still have to pay your dues to the ethereum network and then once b burning is in you're just adding

value to each so i mean from that perspective i think that's even better because it doesn't matter what people think all that matters is what people do and people obviously you know really want to transact on ethereum and really want to uh make money on ethereum or do whatever right it's not even just money making like collecting nfts people do that you know not just as an investment but because they want to um collect things and there's so many other cool things like the the dow stuff that's going on and all the all the human human coordination stuff that's going on a lot of that is definitely powered by monetary and economic incentives but at the same time it's not you know a lot of the time for a lot of people it's not the core kind of value value driver there but i guess

a lot of bitcoin is the core value driver is the is the money right because they definitely chant number go up and all this sort of stuff all the time and you know they're even more prone to use things on ethereum because they can earn more money which lets them buy more bitcoin so why wouldn't they use ethereum to do that and you know if they're not using ethereum to do that right now i mean there's there's reasons like there's risk and stuff like that but outside of that if you're basically not using ethereum because you just hate it and think it's like a scam or whatever um but you know ethereum would allow you to to earn more bitcoin i just kind of think that's stupid like just just use it it doesn't matter if you think it's a it's a scam or whatever um

you can stack more of what you want which is which is bitcoin and you could do that on ethereum right but the the powerful thing about eip1559 is as soon as you understand it and you start transacting on ethereum to achieve some sort of economic end and again ethereum is supposed to be some neutral economic platform that helps people facilitate their goals and then once you use ethereum to help you facilitate your goals which in in many bitcoiners cases might be stacking bitcoin stacking bitcoin is one of the things you can do on ethereum among other things we when you realize that because of eip1559 that you are burning ether you're you realize that like oh i'm using all this thing and and because of the burn i'm adding value to the

ether and so that turns people's attention of a shelling point of money into the thing that they're using and they say oh i kind of see why this would like attract the attention of other people because we're all using it and every time everyone uses it it burns it maybe this is the new shelling point and this is exactly what justin drake was talking about it's like when most people realize that there's a new shelling point then everyone's attention turns all at once right and it's all about and then that's where like that that's where this the ultrasound money comes from is where all these mechanisms it's not just from the mechanisms it's from people believing in the mechanisms too and understanding that they also work and once everyone understands that these mechanisms are working the shelling

point of money moves into the thing that is that is working and that's that is the case yeah and and this actually relates to something that that a term that bitcoin is uh kind of come up with called uh buyers of last resort right and this is like the the the thing where it's like okay well at some certain price point because there's some there's a bunch of hardcore bitcoin is there's always going to be buying pressure for for btc right so naturally btc has a price floor you never know where it kind of is during a bear market but you know that one day you know it's going to hit that price floor there's going to be enough demand there and enough buyers of last resort then it's going to defend that kind of level there now you know i think that typically settles above its previous

all-time high we've never seen bitcoin go below its previous all-time high during a during a bear market uh so from that perspective as well i think you know as more people kind of like get involved with the ecosystem as more people discover that that shelling point as more people believe in the assets there is always that constant kind of you know by pressure on each i mean i still buy e like right now right doesn't matter if it's if it's eighteen hundred dollars and i bought at a hundred dollars or even below that i don't care like just because i bought then doesn't mean i can't buy now and stack more ease now um so you know what i mean like i'm always buying it and there's a lot of people like me and a lot of people always buying bitcoin you know always stacking doesn't matter what the price

is so you naturally have you know a a a kind of like i guess a natural buy pressure there and that grows over time that set of people who are always buying grows over time and they're swapping their their crappy money which is fiat for for better money which is you know people obviously say bitcoins better money and we say eat is better money um and and then just storing their kind of wealth in there and that's where the kind of like story value kind of monika comes from it's like you don't want to store your value in something like usd because they're printing a lot of it you see inflation popping up everywhere like the you know the government's gonna tell you oh there's no there's not much inflation right inflation's fine well no i mean look at that look at it you can

see all the excess in the economy as you said like excess in the economy right now that is is is inflation showing itself so no i don't want to keep my money in fiat i want to put it in an asset that i believe you know is a hard asset and i know we sound like bitcoin is but you know as much as i give them [ __ ] they have a point around this right this is not they're not something that is untrue yeah exactly they understand crypto economics they just don't understand sci-fi crypto economics i'm excited so we have this uh this we just recorded this week with a hazu on eip1559 so after the the triple or the uh ultrasound money podcast with justin drake on monday a week from monday comes eip1559 with hazu which is a [ __ ] great follow through

and ryan and i in our debrief which i'm trying to convince ryan to let me publish uh because the debrief is like the one thing that we gave for for premium subscribers to bankless um we we talked about how bitcoin's economic security model depends on people believing in it bitcoin's security model depends on it being a meme that people believe in and like proof of work works and all and bitcoin as a hardcap works but it only really works if there's no viable alternative and so in a world where ethereum doesn't exist and there's only bitcoin i think bitcoin would work and would be sustainable but in a world where there is an alternative bitcoin is therefore not sustainable and it's one of the it's like the emperor has no

closed metaphors like everyone's willing to be blind if there is no alternative to bitcoin but as soon as there is an alternative to bitcoin bitcoin's meme shelling point which is and the bitcoin is intrinsically secured by number go up so if number stops going up bitcoin stops being secure and like the the validation of proof of stake as a system and then layered on top of that eip1559 if those things work just by themselves do they just work that is a huge knock against bitcoin's value proposition as in as the only system that will really be sustainable i'm not really doing a very good job explaining to it and that's kind of why i want to turn your attention to it because it was a really interesting point where like we kind of came to this conclusion

where like bitcoin only works in the long term in in a silo not in conjunction with other alternatives yeah and i think that that actually goes back to what i was saying about those buyers of last resort as well like if your pool of buyers of last resort or people that are always buying your asset ends up stagnating because there's something better that they can actually kind of look at like as you said a better shouting point then that is also very bearish because i do think that the i guess uh the the gold bug kind of thing is a niche right and that's what that's what bitcoin appeals to a lot of the time is is the gold bugs and things like that and then maybe new people coming in who weren't gold bugs that see the value but at the end of the day most people i

think uh are kind of like utility kind of maximalist so to speak right they see the value in something being uh having utility and eth has way more utility than bitcoin does um so yeah infinite basically and the ethereum network has made way more utility so from that perspective i think we're going to hit a point where you know we're going to have more buyers of last resort or more kind of like i guess you can just call them eighth balls than than btc balls in in the end right in the end stay it might take a while to get there and you can be both you don't have to be one or the other but it gets to a point where you think to yourself you know do i want to buy this asset that you know you know has a hard cap but that hard

cap is actually detrimental in the long run because if it's kind of like security security and we're not talking like 100 years we're talking like 10 or 15 years this would start wearing its head or do i want to buy an asset that has constant buy pressure essentially from uh from from from the fee burn right and his deflationary has this you know kind of very elegant um monetary policy with people of stake in this very very very elegant issuance policy um and then yeah you get that kind of change in narrative i think you know it's already started with a lot of the people in the ecosystem i think over time it'll it'll spread more i do think that more as more public companies put ether on their balance sheet it legitimizes it for for other folk because you know i mean if you see something if you're like a a

person not in crypto and you say tesla puts bitcoin on their balance sheet you're like oh wow okay if tesla's doing it then i've got to do it right a lot of people think like this a lot of people look to these social signals and you know i mean we do it as well right if we even if we want to say that we're not followers we do everyone follows everyone you always look for social validation and social signaling and there's no better social signaling than massive public companies putting an asset on their balance sheet especially an asset that has typically been referred to as a scam in the past right as a ponzi as as not valuable right as dead um and and from that perspective as soon as more you know public companies that people kind of like no i mean my two is great um

and that's a great start but like i didn't know who they were until i heard about this right um we're talking like actual kind of public companies that are in the in the in the public consciousness once that happens for eth that is the catalyst that propels eth to a ten thousand dollar price plus i mean i have no doubt about that because if aids was worth the same as bitcoin in market cap right now it would already be at like 9 000 or something so from that perspective you know we already have like a price a market cap that we can go to that has a precedent in bitcoin which i think is is really really important and cool as well yeah very very true i'm optimistic that kathy wood comes and saves us from from from and delivers to us exactly what we are are hoping kathy

wood would be a great person to spearhead eth on the balance sheet as well um anthony i want to ask your opinion about uh uniswap v3 hayden had that tweet today where he said like oh man i want to i want to talk about unit swap v3 but i can't and like i don't think he would ever tweet such a thing if if uniswap v3 wasn't imminent i'm reminded of that tweet that he made where he showed out the the picture of the new uniswap logo like two days before the uni token got air dropped um do you think that that unit swap v3 happens next week or the week after man man like i i have a dream scenario right now because we have optimism launching soon as well my absolute dream scenario

is is this and i don't know if it's going to play out like this maybe some of it will play out maybe some of it won't but basically we you can imagine this right uni v3 goes live it's on layer one and layer two right there's a dual launch and optimism is the layer two that they're gonna use um so optimism goes live with univ3 as well on top of that there's a liquidity mining program as well somehow on on layer 2 for uni v3 because to get the liquidity there uh to bootstrap that ecosystem and then the third thing which is would be a bonus is coinbase having a an on-ramp into optimism from their exchange if that happened i would be like the happiest person in the world i don't think that lasting is going to happen

straight away i do think eventually we're going to get there but yeah i mean i could see univ3 going live on on layer 1 and layer 2 with optimism that wouldn't surprise me um and it wouldn't surprise me if it happens within the next couple weeks uh because yeah hayden being more active on twitter and teasing it more definitely means it's in audit right now i reckon univ3 is in audit uh right now and it's probably finishing up very soon and as soon as the audits are done i'm sure they're going to be itching to just launch it right just get it out there and i actually think that can be a catalyst for the next kind of move in in its price the hype that that's going to generate the especially if it's on layer 2 because we have the narrative right now that ethereum can't

scale you know from from everywhere and we're going to show people that you can scale and it can scale better you know then then you're kind of like um alternative blockchains but yeah i don't know i'm hype as hell for that and i think it's coming it's just until it actually gets here you can just you know it's the same thing you can just tell people it's coming a million times but you know it's you have to wait for it's actually going to be released before people were going to listen to you um but i yeah i do think that v3 is imminent like any day now man i mean i mean i i hope hayden wouldn't tease us like this if it was like another two months away right uh so yeah but i mean and and the funny thing is about v3 is

that like there are kind of like i guess theories about what it's going to have but there's no like kind of official documentation you don't know exactly what it's going to be but you know the way it's been hyped up and how long it's taken to build it i think it's going to be a massive release it's going to it's going to bring some really new things to the table i think but it's also going to um maybe not kill existing protocols but kind of like subsume a bit of existing protocols liquidity like you can imagine if unisop released something that allowed you to kind of um change the weights like balancer does and alter the fees and stuff like that that's going to eat into balances market share what if unisop releases a stable coin curve right like like what curve has that's going to eat into curves market share so

unisop has the best brand awareness by far it still accounts for 60 of dex volume you know they can just like eat so much of this other volume that's going on by releasing this so it's i mean i think i actually think they're going to do that and i think on top of that they're going to have a bunch of other features impermanent loss protection i mean i know that's a meme but there are different ways you can do it so from that perspective man like it's just it's hard not to be hyped and i just come on hayden stop teasing us like this is so so bad now like i feel so teased so uh yeah you're totally right and i always kind of felt like that uniswap v2 was really just like a placeholder for unit swap v3 like to me uniswap v2 was token

to token pairs and the token and that was it and and everything else was just i think gas optimizations was a big thing for v2 um because v1 was built like a long time ago right when when gas wasn't an issue um but yeah definitely v2 felt like a stop gap and a way for them to retain market share while building v3r because they probably realize that v3 will take them a lot longer to build out um but yeah even though you can say that uni swaps kind of technology maybe isn't the quote-unquote best right right now with v2 that doesn't matter they've still been able to to assume most of the volume um you know 60 plus of the dex volume which is insane right and and you know it's funny because they actually have real competition in in sushi shop right where

but the thing is with studio swap is that it's almost that liquidity parity where it's got almost as much liquidity in terms of tbr but the volume is is not not close right it's not volume that's the harder fight volume is way harder than liquidity liquidity exactly you can pay for liquidity right exactly you can pay for it with the sushi rewards and that's not a knock on sushi swap i mean i hold sushi tokens as well but um from that perspective uni swap is the one that still has the volume and they they aren't even incentivizing liquidity either so they have like the same liquidity but they have way more volume um without uni rewards i mean you know and a lot of projects are actually not even incentivizing their liquidity on unisop anymore they're actually going and opting to incentivize it on sushi

swap right um which means you know there are arguments that say oh you know unisop isn't isn't subsidizing the liquidity but other projects are by paying out liquidity mining rewards and yes that counts for some of it but the top pairs like the the the stablecoin east pairs and stablecoin wbtc pairs and wbtc eth they're not incentivized and you know dpi 8 is one of the top pairs the incentivization there is only like eight percent or something a year which is probably not worth it for a lot of people um but i i do think dpi eats as a pair in general is amazing because you know why wouldn't you want to hold the d5 index or e it doesn't really matter but yeah i just it's just crazy to me how how unisop has retained this this market share um even with all this

competition at the gates and it's another reason why i actually think to myself like uh why why hayden kind of like he doesn't attack sushi swap anymore but like talks about it or like you know makes it known that he views it as like i guess a threat so to speak it's like why man like unisop is doing amazingly right now like i get that you're you know people are salty because they just forked uni swap but that's what happens like it was open source it was ready to be forked and you know sushi swap did it did it well with liquidity mining and i know you know it was at the time it was ugly and everything but just i i think at this point v3 is just going to absolutely blow everything out of the water um they have the smartest people working on it

not just with unison the unisoft team but paradigm the the the i guess like paradigm was their first investor and obviously has a huge stake in uni swap they have the collection of some of the smartest minds in this space working on this stuff day in day out and have been working on it for years um and they're also working on optimism and optimistic roll-ups too so competing with that is just so hard it's just so so hard and there's a really strong salient lesson to be learned about uniswap v sushi swap right because as you said like the liquidity on sushi swap matches liquidity on unit swap but uniswap doesn't have to pay for it because it collects the fees and so the liquidity is on unispot because of there's so much economic volume going

through uniswap that the system incentivizes itself whereas sushi swap doesn't have the same volume so it has to issue further seniority it has to issue new coins to create that same level of of of liquidity that's on uniswap and we can extend this back to ether and eip1559 if you have an economic network that is high utility and is generating high fees you don't have to issue your token anymore to generate that same economic output it's the same model and so this is the tailwinds that i think will be behind uniswap for the rest of time if you because like economic activity begets economic

activity and if economic activity is begotten then you don't have to issue tokens anymore and therefore your tokens are more scarce and more interested and and people are more interested in holding those tokens until their end of time the funny thing is about the the uni token as well is that it's worth so much right now i think it's like a 35 million fully diluted market cap it doesn't have a cap by the way i don't think many people realize this they're going to be issuing new uni in perpetuity they have no monetary policy no exactly yeah yeah and most of that that um that value is locked in the treasury as well it's vesting so right now the treasury has over a billion dollars in it but it's vesting out over time and at

current value the treasury is worth 15 billion dollars fully diluted that is a huge war chest for for uni right there and even if the price goes down right which i don't think it it will too much because people do the the comp trade you know uni um compared to coinbase because coinbase you know it does more volume than coinbase on certain days so if coinbase can be worth 100 billion dollars why can't you swap that that treasury is just absolutely insane right especially when we're printing money it's it's literally at that 14 billion dollar level it's it's effectively infinite money because it'll just keep on going up so long as the federal reserve is printing new cash yeah exactly and i mean it's just it's crazy like how how much demand

there is for it i mean it's natural because like a lot of new users will discover uni stop and then want to buy the uni token right um and like there's not a lot of selling pressure because most of it is locked in the treasury uh there's no liquidity mining right adding to the cell pressure that everyone who got the air drop and sold has sold at this point like there's no air droppers left that to sell in mass like yeah exactly so from that perspective yeah it's just it's just incredible that they have such a such a large treasury that i don't see going down anytime soon unless we have like a mac a whole bear market right like i'm talking just individually during a during a kind of bull market but yeah it's it's pretty crazy man like and i mean sushi swap has

a big treasury as well but it's nowhere near as big as as unispot and i mean there's other teams that have treasuries but and that's another thing why number golf is so good is that your larger treasury you have the more you can fund uni stops at a point right now where they have too much money they don't even know what to do with it right like they can't spend that money fast enough and you know they have a grants program and i saw that it paid out the other day but they had like had to go through all these applications to make sure people weren't like scamming them or was actually a legit project and they paid out like 750 000 which is like 0.0 whatever of the total treasure or anything it's around it's nothing exactly and it's not because they don't want to pay out it's just because like

paying out money you know out of a treasury to projects that need it takes time because you have to review it you can't just like really nearly give everyone money but they already did that with the uni airdrop they're not going to do that again so uh yeah i mean it's just great that we have like all these economic kind of bandwidth i guess you could call it to to pull from to pay out you know especially public goods i can imagine uni being a a get coin sponsor every round now like until we die until the end of our lifetimes yeah yeah exactly so i mean that's just overall incredibly bullish and what's even more bullish is that uni swap is like incredibly ethereum aligned right they are essentially i mean i would say hayden i i don't want to label him as an

ethmaxy or whatever but he's incredibly ethereum aligned they're working on optimism and layer 2 technology before they even have a cross-chain strategy which i think is good and i don't blame anyone for having a cross-chain strategy that's from a business perspective that makes sense yeah yeah or you're gonna just get forked like union got [ __ ] as pancake swap on bsc right and if they just deployed uni swap on bsc they could have captured that market share so um and i wouldn't blame them for doing that but again uh i i think that they want to focus on layer two because i think that's where the long-term value is and unisoft's always been about the long-term uh so i respect them for that because yeah they definitely could have just deployed on bsc and and and kind of like gotten a lot of the activity but i

think that they care more about the long-term kind of value here than than the kind of like short-term value extraction for sure totally um totally um hayden has we have the social contract at bank list with hayden that when v3 launches that he comes on the bankless podcast like we we've deliberated on this on crypto twitter and i can here's the alpha leak for people that are tuning into this uh into this live stream is that hayden talked about hypothetically recording a podcast with us at some point in time in the near future so uh v3 is around the [ __ ] corner oh man i just i just can't wait because i know what's going to happen i'm going to be sleeping when it gets released right because they're us-based and i'm

going to wake up and i'm going to check my phone and i'm going to check crypto twitter and it's just going to be oh my god you're using something notifications yeah and i'm just going to be like run to my computer and spend the whole day just like catching up on everything that happened uh because these things always happen when i'm asleep man like i think the uni token launch was the one thing that didn't happen while i was asleep they launched it like evening time in new york because that's where their base which is which is weird to me but i i thank them for that because i got to experience like all the fun of it um in real time but yeah i just know that's just what's gonna happen and it's gonna be funny to kind of watch uh watch crypto twitter like kind of melt down

with this as well and be like holy crap like it's oh it's live like it's the most amazing thing ever it cures cancer like you know because that's what it's hyped up to be at this point oh well anthony we're coming up to the to the top of the hour so now that we've live streamed for an hour i'll ask you the question which i have never yet asked you what do we want to do with this live stream thing do we want to keep on doing this every week like what the hell is this thing or what are we doing here yeah yeah i mean it was funny because you messaged me the other day and you're like dude we need to do more stuff like we need to do more daily way bankless stuff i'm like yeah yeah let's do it and uh

i didn't really think of anything at the time but you're like let's just do a live stream kind of maybe once a week and we'll just talk whatever comes to mind like we had no agenda for this guys by the way everyone watching or listening it's like just we just started talking and and that's it like uh and i think we can do this once a week yeah i mean i i'd be down for that like i'm always down to talk about it ethereum and there's so much happening i mean you know even though you do all the bankless stuff on the daily guy i do the newsletter and my and my kind of like youtube daily videos recapping everything man i stan and and i even do the ether podcast with eric still right once a week i still don't cover everything right like it's there's still

more to talk about um and bounce off each other about too so yeah let's let's do this once a week man like i feel like people get a lot of value kind of out of this for sure friday evenings for the american bros and saturday mornings for the aussie australian bros i guess that's what we're going to do yeah yeah all right so uh listeners subscribe to to bankless subscribe to daley gray i guess if we're going to do this on a weekly basis i'll try and figure out how to get this dual stream to both bankless and daily guay but this is uh your guys's cool new friday night saturday morning activities so congrats you guys have a new activity to add to your calendar yeah yeah exactly especially you know i know for me in australia there's no lockdowns or anything but i know a lot

of the world is still under quarantine which i mean sorry covered restrictions and lockdown so you know probably not going out on a friday night any you know much anymore so yeah definitely something to to watch and listen in on to keep you entertained all right well thanks everyone for tuning in wow 225 uh viewers on the first ever live stream holy [ __ ] uh the people want it uh so thanks everyone for for tuning in to the first ever live stream and uh stay tuned for literally seven days from right now for live stream number two