Web3 weekly: is ETH dead, embedded wallets and the state of L2s

Transcript

GM GM welcome to another episode of web three Academy your one trusted source to capitalize on the next big phase of the internet we make sense of an onchain World in constant transformation do not get caught in the meme coin hype cycle I'm jird joined by my co-host Kyle rehead and we believe that the Bitcoin ETF is coming so soon and will change the world that's why we're carving a path for doers to confidently build and invest in web 3 friends we've got a excellent episode our final episode Before Christmas comes along in the holidays but we're going to be talking about is ethereum dead is eth dead should we get out is that a bad trade we'll touch on that a little bit in the

market watch but more in the middle of the show where we'll talk about things going on ethereum ecosystem the salon sagap phone is definitely not dead I'll tell you that for free because that thing is pumping yeah the phone I'm not talking about the token although that thing is too but speaking of things pumping we'll also talk about mean coins there is the mecoin media which is brewing Jay says don't get caught in it but don't not get caught in it too you know you might want to be in that uh speaking of things pumping inscriptions are just going nuts on basically every blockchain now this is no longer just a Bitcoin thing we'll cover what's going on there and then some new innovation happening across gaming we've got something that I'm really excited about called Global embedded wallets we'll explain what that is and so much more

Jay before we get into this though what's your grude I am grateful that Christmas my favorite holiday is right around the corner my wife Sam's parents are here right now next week my brother and my sister and my ex stepmom I got a weird Modern Family are all coming uh to our house and the week after that we've got a group of friends coming H it's just a great season seeing so many friends and family very excited uh to celebrate Christmas I got my favorite Christmas sweater on right now if you guys are watching on YouTube or on Spotify I got my Christmas hat it's a good season you know Christmas music playing we watch the Christmas movie last night I just I just happy you know it's all good that's nice I love that

look I'm pumped for Christmas too December are a bit exhausting because of all the birthdays and other things but I very pumped but I'm actually more excited than grateful for what's coming in less than two weeks now which is my girlfriend and I are taking a year of traveling I obviously work while traveling so that's going to be great she's doing somewhat similar but we are heading off to Argentina buenos AAS in January 2nd uh we'll be there for a month then we're off to chill then we're off to Brazil and then we don't really know where from there but probably Central America but it'll be a nice six months of warm weather Beach surf all the wonderful things uh so as much as I'm pumped to be in Canada for Christmas and be a family my mind's already over in South America at this

point so exciting we should uh get a little web three Academy tour going on well you guys are touring the world yeah we might have to all right let's start as we all always do with the market watch make sure you guys are on top of what is happening in the markets they don't sleep during Christmas during New Years they keep on rocking and we want to make sure your Investments are safe and confident Kai what's going on in the markets this week yes so quick Roundup we've had a nice little pump this morning after a bit of a dip but today we are up 4% on bitcoin for the week we are up 6% it's been a struggle of a week but it's been a nice morning to say the least ethereum as well is also up 3% it

is lagging uh Bitcoin which doesn't necessarily come a surprise we always said the flows of crypto work similar to past Cycles so we're only up 3% today up 2% on the week and then salana just the Beast that you know the gift of Christmas that just keeps on giving is up 10% today up 177% of the week 31 of the month 383 on the six months and 700% on the year is just an absolute Beast one that we didn't haven't covered a little bit but we wrote a bunch about in our Pro report is coinbase this thing's actually almost even better than salana is this thing's up 4.6% today up 10.8% in the last five days 67% in the last month

it's a stock and this thing is just absolutely crushing it Kos to anyone who got into coinbase we put out a call I don't know about a month ago now but actually we we also put one out in like August I think it was when it was around 60 bucks so you'd be almost 3x that by now if you um if you were a pro subscriber it's a good day good week good month for assets crypto and Tech at large I I just want to show this one we talked about this a while ago the NASDAQ which remember we talked about that cup and handle thing you were like you kind of laughing when I explained that chart pattern look at this thing it's like a quarter of the way played out so far it is just going nuts NASDAQ is now past all-time highs uh which is very bullish

just for macro and everything at large so that is all good news it's smooth sailing we put out a newsletter last Friday called Full send everything and that's basically where I think we're going for the rest of the year so good times ahead here's the not so good times for a lot of people in this space that are really big into eth and I want to talk about this which is the eth BTC chart I've covered this like big seven-year wedge pattern that's going on with eth Bitcoin basically said if it breaks to the upside then you know eventually ethereum flips Bitcoin if it breaks to the downside well that could be sort of bad news for eth doesn't really don't really know what it means but it's a big big big pattern that kind of tells a long story of two main assets across an ecosystem and at the moment

for a number of weeks we've been kind of hitting along the blue line which the bottom of that wedge pattern but we've never really broken through we've broken through little bits but never closed on the weekly we still have not yet but eth is now at 051 the eth the Bitcoin ratio and the weekly here is well below that blue not well below but it's below the blue line now we haven't closed on the week so it's not a confirmed breakout to the bottom and even if it did close like you got to give it a couple weeks but we're flirting with territory we have not seen in seven years on the eth Bitcoin ratio for this specific pattern so it's a telling sign we'll see where it goes maybe we close this thing out at the end of the week I don't know let's

see what happens but definitely something I'm really watching uh and again I think if Bitcoin ETF uh approves then I think e sees it moment uh and this likely comes back into that wedge pattern and goes up much higher but maybe not I mean is eth dead is the title of this episode and that's something we're going to cover in in a little bit the one thing I just want to say before we get into in the middle of the episode we're going to get into fundamentals but from a markets perspect perspective from an investment perspective I've had a ton of people asking in the Discord what's going on with eth should I be rotating into salana or other tokens at this point or back into Bitcoin and the one thing I want to say is is this industry is super narrative driven and what often happens

is we take a narrative we go too far to that narrative so far to one side and then we mean revert and we come back to where the sort of Middle Ground is the mean is and we could think of this the salana right in in January February March everyone's like salana is debt salana was down to 8 at the beginning of this year and it was ethereum in the L2 ecosystem was it it was like that was the take that everyone on Twitter said and it was so obvious and all of a sudden you know a few months later we have salana just absolutely tearing and ripping apart and now everyone's like oh ethereum in L2 makes zero sense it's definitely this monolithic chain and salana is the chain of all chains and it's going to flip ethereum and it's

like yo three months ago everyone on Twitter was saying the complete opposite thing but people see this price and they just all of a sudden go oh you know what Everything's changed the fundamentals have changed it's like that's just not how this stuff works and so I just want to remind people like if you're jumping into a trade because it's the and I say this in quotations the for sure thing you're probably about to get wrecked right the last thing you want to do is join the trade that everyone's already doing that's saying it's the for sure thing because that's when it's typically too late now these things can run for a long time and I'm also by the way not saying don't buy Sal whatever I've been putting calls in Sal for a long time in fact I have up on the screen here this

was a very contrarian take at the time this was early October or in October I said hey it's Sal's time I think we should be putting money into salana I think it's about to rip in October which was what what is it three months ago something like that not even two months ago yeah yeah two months ago this was kind of a risky thing to say I sat there when I wrote this out and said Solana's time has come I said salana looks really good and I was like should I put this in there like people are gonna get mad you know and like people might get wrecked and I was a little bit scared and I put it and obviously it was an incredible vet this was like it was at 25 bucks when I said this and then even like a month before that I said hey my spy

senses are tingling I think markets are about to have a big move upside yet for the last three months before this we had a down down down only in all markets and then I said hey it looks like I think anyway the fundamentals are lining up that things are going to go up really well even though that was very contrarian and it was tough to say this one as well kind of put myself on a limb there and because everyone was calling on Twitter that we were dead inflation was going to go higher markets were going to go lower and so this wasn't a non-crowded trade and so if you got into markets all of a sudden everyone rushed in because they're like oh [ __ ] we're behind same with salana if you were took the contrarian take and said hey salana is not dead I'm gonna buy this

throughout the year when no one was talking about it those are the times you want to be buying when no one's talking about it but the underlying fundamentals are still there and I kind of think that we're at that stage right now with ethereum it's weird to say that ethereum is a contrarian take considering it's just been the take all year but over the last month two months if you look look on Twitter everyone is saying ethereum is going to die which is just doesn't make sense and that's when you start to know okay sentiment is really going the wrong way we probably just mean revert and so that's my base case on what happens here but again let's see these contor takes though these are the best times to be investing so I would not be selling here now if things don't go well

after the ETF whether it's approved or not approved and ethereum continues to lag at that point I might I might start to change my thesis but right now I'm sticking to the plan it's amazing how short-term memory is such a thing in investing and in crypto like things move so fast and within a few months you can completely forget what was true two months ago and is still true today has not changed and and by the way in the rest of this episode we are going to have a big section on why we think the fundamentals are still there for theorem even though I know a lot of people like well the gas FES are too high we're going to talk about that whole scenario a little bit into the episode that'll wrap us up for the market watch let's get into all the big things going on in

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integrates gp4 natively in paragraphs create edit and improve your writing effortlessly with one click and guess what we at web3 Academy are on board and have already moved our content over to paragraph We believe this is the future of newsletters because of the profound engagement it creates between creators and fans so whether you're a Creator writer or an Avid Reader it's time to check out paragraph and capitalize on the opportunity of being early welcome back we're starting off today's episode with a little bit of talk of what is happening with the Bitcoin ETF when do we think it is coming and you know who

thinks the Bitcoin ETF is interesting is the dois man the most interesting man in the world bitwise put out an ad for their Bitcoin ETF which isn't even live yet their Bitcoin spot ETF I'm just going to play it for you guys here so you can check it [Music] out you know what's interesting these days Bitcoin look for bitwise my friends I I used to love this guy the most interesting man in the world just a legend a really good ad I mean look it's super basic super simple but like people Vibe with that ad I think if if you know

the the dois commercials my big take here on this J is don't think that people realize how much marketing is about to come into Bitcoin and ethereum at large this is the other thing with ethereum too because likely that that ETF is coming as well so next year is going to be full of commercials and buil boards and you know ads everywhere from the biggest institutions in the world trying to promote their Bitcoin ETF and then eventually their e eth ETF so the Dynamics of I mean crypto being a contrarian toer about to go out the window because you're gonna have all the biggest financial institutions in the world running ads just like this and if this is the first one tell you right now Black Rock sees this and goes okay let's beat them and who they get I don't know

Tom Brady or maybe Tom he already went with FTX and that didn't go so well but like you got to assume there's going to be bigger celebrities better commercials coming in the next few months so I'm excited to to see this all play out I wanted you to share when you think the Bitcoin ETF is coming but before you do some news out of Black Rock what happened with they made a change to their ETF filing what happened here yeah so it's this new is actually not even just out of Black Rock there have been 24 meetings with the SEC and all the Bitcoin ETF institutions in the last week alone Black Rock met with him three times last week three this is just unheard of and they're basically at this

point it's a done deal they're just figuring out these two different I don't really want to get into details explaining because honestly I don't fully get it but you could have in kind or in cash is the way that the the Bitcoin ETF works so basically you got to pay it's some of the background stuff so that's what they're sort of debating on there's there's two different ways that you can do this and SEC wants them all to do it one way but for the ETF filers the companies they want the other way because they think they can make more money that way and I think it's just a better setup but the SEC is worried about the ability to money launder through the CTF and so they wanted this other a little bit more stricter way it doesn't really matter for us like the users the consumers for

the most part so anyway they've basically all decided and agreed that they'll just do what the SEC is saying and so they've all made these amendments over the last week Black Rock included and it looks like most of them have now done it and so now we're just like waiting there is a chance that this happens before Christmas so by Friday and if not by Friday we're definitely waiting until after the New Year because I think they shut down over the holidays anyway so it's most likely it's January 9th um January 9th or 10th there's like a small window which is maybe explaining the pump today I'm not sure but that we get this thing by Friday which I I put up a tweet this morning I was like imagine this timeline the SEC approves the Bitcoin spot ETF and then Gary gensa just tweets out Merry Christmas you

filthy animals and it was just like you know I I thought that I was like kind of think he would do it like actually see troll on Twitter anyway it'd be funny but we'll see if it does we confirmed we live in a simulation but let's see what happens all right Elon from living in a simulation to salana how can we not talk about salana we're talking about it every week right now the salana SAG of bone is absolutely humping what's going on here Kai yeah this one I wasn't expecting so obviously very bullish in the on Sal and its ecosystem a lot happening there but then this wildness comes which also is a little bit of a top potential top signal I don't know

that it is like I don't think this thing tops we so early in the bull market that saying any top signal is ridiculous but when I say top I mean like a local top when things get a little bit crazy so the SLA seaone launched I don't know last year or whatever no one really bought it they sold like a couple thousand but they only made 20,000 so the rest were all just kind of sitting there but what interestingly happened here is that when you bought the salon Sega phone because it's a hardware wallet inside that wallet was a 100 million B okay 30 million sorry 30 million bach bach is the meme meme coin that's on salana that's been going absolutely nuts is now worth like 1.3 billion market cap and so just last week people realized oh if I'd buy this phone

for $600 at the phone cost the amount of B that's in there because it's gone up so much in the last few weeks is now worth more than the phone itself and so people realize they could buy Salon a phone sell the b or hold the B if you want and they get a phone for free and so people started buying this thing up like crazy just because they could get a free phone for it why not right makes complete sense so all of a sudden they sold out in a matter of a week you can buy Salon of saga phones on the secondaries on like eBay for two to like 4K at this point the salana Sega phone is now selling for more than the iPhone 15 Pro which which is just absolutely insane and so this has just been wild

and then what happened was all of a sudden there started being rumors that other applications on salana that are airdropping tokens are going to drop extra tokens to salana Sega holders so then that's why it started to sell for even more on secondaries and we had our first one just yesterday access protocol which is a protocol on top of salana that has already air dropped 100,000 ACS tokens worth about $250 so if you buy this on a set phone which you can't now well you can buy it on secondaries only you're basically getting about $1,000 so far plus potential more airdrops there's rumors that J Jupiter which has its airdrop coming in January is going to give extra tokens to slga phone holders as well so just a wild story on the timeline that I

did not expect but once again I think I say this every week only in crypto does this happen and actually only possible on salana the idea of speculating on a piece of Hardware makes zero sense unless it's like I mean it's not speculation anymore you just a guarantee you buy if you happen to get that thing you get your B you get your access you get your B but I mean if you're buying it on eBay for two to 4,000 you're clearly speculating on the right and what I don't understand is why anybody would buy a phone that they are no longer making and likely will not continue to make because salana has decided to focus on building a great blockchain which like kudos to the team great decision The Saga was really a

marketing play for that yeah maybe they thought they could build a great piece of Hardware because we need better wallet Hardware in order to manage our crypto and they were like we'll just put it in the phone so like sure the thesis made sense but now that they've decided not to continue making the salana Saga like this is clearly a speculation play like I don't think any of these people even plan to use this phone it's my bet no I wouldn't think so well I mean like the nice thing of it is you can have your normal iPhone and then you have your now your Hardware wallet phone that you used to like go and farm airdrops and play around like D gen's going to dgen and so it is a great way to sort of separate and actually probably a lot safer more secure because you're not

mixing up your like metamask and your normal phone like kind of get that but otherwise yeah it's basically an nft there's 20K collection right it's got utility and then there's the spective aspects around it where you might get air drops it's like Bard at yach Club at this point so it it's pretty funny but there's just no place like crypto for degens that's for sure like where else do you get a speculative Mania around a phone it's hilarious I love it really really do love it well speaking of No Place Like crypto and bonk going crazy mem coin Mania is in full effect right now they're meme coins are firing across all chains several L1 several L twos you know Bon isn't the only one now Bon is

doing particularly well because earlier this week it got listed on coinbase it became only the third meme coin to be listed on coinbase and as a result it shot up to a two billion MO two billion market cap and then came back down to a 1.2 billion market cap the fact that a mcoin has over a billion market cap is absolutely insane though and that's not the only one we also have Coq over an avac which reached 200 million we have Ninja on injective that reached 30 million market cap Nola on arbitrum reached 14 million market cap and Toshi on base got up to 60 actually got up to 100 million market cap and then drop back down since then so there is a lot

happening on memec coins everyone's wondering should you be investing in mem coins big big risk obviously here's the interesting thing to me is that Meme coins right now are they're creating value in real time and they're also creating discovery on chain so well we all talk about you know meem coins are silly they have no intrinsic value they are making real value across a lot of l1s and a lot of l2s who are hosting these meme coins and as a result they're getting increased traffic they're getting increased volume and their native token is going up because whenever you swap you need to use these your native token so there is definitely benefit to all of these chains and as well Traders are forced to discover you

have to learn how to use this train you have to swap over to that chain you've got you know a lot of Traders have never used injective that's a lot a new chain that a lot of people are talking about right now so there's a lot of discovery that comes out of mcoin so what I'm saying is I'm not involved in mcoin Mania I'm not investing but it certainly is leading to a lot of good practice of people just trying to use new blockchains which is what we want in the space now it is DG using it it's definitely not onboarding new users I don't think I don't think my mom and my uncle are coming in and buying Bon and pepe but uh there is some good that comes from this for sure yeah I think

you know we always talk about social tokens Community tokens things like that which um generally are are more thought of as like speculating on a person or on a specific you know use case whether it's a DA or whatever um but the thing that I'm kind of seeing I saw some TW about this and I thought it was a good take was you know I think meme coins are just their own version of a social token it's basically turns into like a community token it's got this branding of some whether it's a dog whether it's a dog in a hat or not a dog in a hat or whatever like they've got something around it that people like and people play around with and then bunch of people come in ends up creating the sort of community people create memes around it like it is internet communities and

internet culture like at its n like at its roots look again I don't participate in it and I think you know people can get wrecks you can also sure you maybe you can make some money if you're early enough um but it's kind of cool it's kind of fun and I think it's a great thing for for people that just like live on the Internet it's fun for them why not so at the same time another meme coin that's done really well uh and no surprise it's on Solana is dog with hat which is just the most ridiculous name and we got a great tweet here from nft stats dog with hat is up I think it's almost a 200 million market cap right now and less than a week to get 200 million by the way less than a week to get to 200

million so he says pets.com took 18 months from launch to reach its bubble valuation 450 million dog W dog with hat took less than a week to reach 210 million and it's just getting started one big difference though dog with hat has a hat and then as if that was the end then Phantom tweeted ghost with hat which sent a whole bunch of people crazy thinking that Phantom was going to do an air drop Phantom had to follow up and say we are not doing an air drop we're we're not doing a token you know you you got to be very careful if you're these larger uh protocols or wallets in the case of phantom that you don't send

people into a frenzy and good for phantom for squashing that rumor and so that's leading everybody to say is eth dead and here's another great tweet it says if eth doesn't put on a hat soon I think we're done oh man I I I saw a tweet from a a very renowned investor Chia is his name so some people will know him he goes a lot of podcasts but he's like really big investor across the space and all he put was I was showing my wife some of these meme coins and the first three I showed her she just looked at me like I was an idiot and then I showed her dog whff hat and she immediately bursted out laughing and he goes do with that information what you will this is not investment advice little bit of alpha the Hat

that's for sure I did not expect meme coins to be such a hit this early in the cycle but it's it's kind of the first cycle where we've had a bunch of meme coins existing and so it's interesting to see the cycle Dynamics play out not the same as previous Cycles best because they didn't really exist previously so that's cool also Salata allows for Pure degeneracy at a very very low cost and so if you are a d gen that just wants to you know screw around with anything and everything makes that possible we didn't really have that in the last cycle it kind of makes sense that this stuff would come earlier than than previously uh and in fact Sal has been doing so well as a result that salana has just flipped ethereum in 24-hour Dex volume for the first time in history so that's

huge and then also in the same week salana flipped ethereum in weekly nft sales volume for the first time ever so the charts in salana are boners right now if you look at the users they were at about 250,000 all year and going down every single month that's 250,000 I believe it was monthly active users could be weekly I can't remember we don't have the chart up right now but just in the last two weeks it's gone to 1.5 million active wallet addresses so these numbers are crazy now the thing look I'm super bullish on salana I'm super bullish on their ecosystem so like don't take this as me saying anything about salana whatsoever the one thing that we all need to understand though is all of this most of this is fake the reason that this is happening is it is extremely

cheap to move money on chain and so you go to Jupiter which everyone's farming the airdrop right now and you just take your 10 soul and you move it back and forth you just keep selling it from sold to jeta sold to sold to jeto sold to Bon to whatever to any token you think uh on any application you do it on juper then you do it over on the next one and the next one and all the dexes that exist there then you go to the nft ones like tensor Etc and you same thing you buy sell you buy sell you Buell just like what happened on blur over the last year where blur's volumes got so inflated because was everyone airdrop farming meanwhile there wasn't actually real uses there and so same with stable coin same thing same with defi use liquidity all these things are going nuts in

salana not because there's a lot of new people coming into this ecosystem and using salana over anything else it's because everyone in the ecosystem that already exists has moved off ethereum polygon Avalanche whatever else and they're moving over to salana to farm so these are not like people that are like die hards on salana it's just a bud of moving over there and because it's so cheap you can spin up a thousand wallets in five minutes and you can just ch move like one soulle over to each wall and you can do this with a bunch of wallets and so this 1.5 million addresses is not 1.5 million people and say with these volumes all this stuff it is not real now there's a lot of liquidity going there Sal is now over a billion tvl it

was like 200 million a few months ago so like it is great there are a lot still new people going over there and playing around it they get to see and experience it's like it is a net positive for salana don't get me wrong as I said I'm super bullish I'm just saying that don't let these numbers make you think that everything else is crap it's just because that's where the air drops are and so when new people come in it doesn't change anything for other people it's everything still looks the same it's a bit of a illusion at the moment and these numbers are very inflated I just want people to understand that like the revenues that these apps will be making as a result of this are not true revenues right just like the volumes that blur made back last year were not

true volumes and we've seen this play out on every ecosystem and this isn't just a slot of thing this will already has happened on ethereum l2s Stark net has inflated users ZK sync era has 1.4 million addresses it says that's not true that's just people air drop farming so like just most metrics on chain re now are crap and so just like understand you need to take your onch metrics with the grain of salt at the moment okay so that brings us to an important question that you raised earlier in the show Kai is ethereum dead what is the state of ethereum and we want to take some time now to just talk about the ethereum ecosystem both eth and the l2s on top of it to really take a deep dive and look into the numbers and see is this

narrative that's happening in Ling out in real time on crypto Twitter is it true so I've got up on the screen here a tw Twitter thread from sassel real leader in the ethereum ecosystem great follow on Twitter and he puts out this thread where he says contrary to popular belief the ethereum ecosystem is growing rapidly with l2s leading the way so let's take a look at some of these numbers and see what's going on first we have daily active addresses across eth and l2s are at all time highs they are over a million around 1.1 1.2 million and that is up from about 500,000 at the beginning of this

year so all-time highs continuing to rise we look at transaction count also all-time highs up over 4 million start of the year around 2 million we look at L2 stablecoin market cap also at all-time highs up over for 2.5 billion it's probably around 2.7 2.8 billion start of the year around 1.5 billion we look at lir 2 tvl also at all-time highs up around 1.5 billion start of the Year sorry 16 billion started the year around five billion we look at fees paid by l2s to

L1 at all-time high this one in particular is at a crazy all-time high because what incription because of inscriptions we'll talk about those next after we finish off this story right so so you look across the ecos system oh I got one more here TPS transactions per second also at all-time highs showing look it's nowhere near the transaction per second available on salana but it is consistently growing consistently growing up getting to faster and faster speeds so that ethereum will be able and the l2s will be able to scale in the same way that Sal is the confusion markets right now is we've talked a lot about the modular and monolithic

blockchain right a monolithic blockchain is a one blockchain everything's on that one chain and that's it modular is where you separate the stacks of the of the the technology so the data availability layer the settlement layer the execution layer onto different chains or different Technologies and you have things like layer ones layer twos Etc it's separated and so a lot of people right now are seeing well ethereum is very expensive you use a the right now it's insanely expensive and so it's like basically unusable for most people unless you're a whale and then people look at SL like well it's super super cheap and then they look at l2s like okay these things are fine they're not super super cheap like salana is but they're pretty cheap but it's fragmented you got to bridge from one to the other and so people are now saying well if salana is this fast

let's just put everything on salana and then we don't have to worry about all this fragmentation and bridging and blah blah blah and so that's sort of where the market is at and everyone's kind of decided out of nowhere over the last two months like okay we're done with the hudler thesis we're going with salana because we can just get everything on that one chain and there's a few reasons why this doesn't make sense the first is what should be obvious to everyone which is we're not going to have everything on one chain that's just obvious there's a million other chains that all also have uh benefits to it and have good apps on them and so no matter what whether it's a bunch of l1s or we have a bunch of l2s you're going to have bridging from chain to chain we're going to need to move

assets from one chain to another regardless and so I ask people all the time on T I'm just like okay unless you think everything goes in salana moving forward which isn't just never going to happen we're going to need bridging so would you rather Bridge from an L2 to an L2 which already exists as fast as cheap as easy or would you bridge from L1 to L1 which is already quite difficult and more expensive and very risky at the moment so like in terms of bridging it's actually better to do it from l2s now if you never have to bridge cool but just that's never going to happen although when I get into what we talk about just a second we're going to going abstract all that way regardless let's talk about there's two takes one that DC investor said one that I said that I just want to

read and go through real quick to help people understand where things are at so DC investor says he tweets out says the L1 or layer one bet is on DJ doing swaps all on the same onchain throughput this entire bull market the L2 bet is on new or traditional web apps using existing l2s or creating their own to leverage their own CIP resistance value both will do well but l2s have exponential mainstream potential so what does that mean what are we talking about here what people are stuck on at the moment is they think that the way we have used blockchains in the last four or five years is how we will use blockchains in the future and how new people use blockchains in the future and what I want people to understand is that that's just simply not the case there is tens

of thousands of people that will dejen the [ __ ] out of any blockchain regardless of its ux using these weird wallets and these shitty apps and farm air drops and blah blah blah like we all do right most 99.9% of the world will never just they will never do that doesn't matter how good you make the ux how fast it is how cheap it is just most people this world will never do that so what will most of the world do they will just use the internet like they normally do but eventually one day that will all be powered by things on chain okay but it won't be connecting wallets in this way and like you know getting your assets from coinbase over to this thing and like doing all they'll just go use an app and it will just work okay and

this is where the modular framework makes so much more sense go over to mine I'm just going to read my thread that I posted this morning starting to gain some attention people are liking it but here's why I think the L2 thesis is still not dead and it's actually playing out better than I think most of us thought and it's really funny because it's going really well right now yet everyone's fading it thinking that this is weird and shitty so the L2 thesis is playing out better than I think most predicted yet everyone is fading all sudden it's become a joke that there is now so many l2s but this was the plan all along what people are missing here is that ethereum has found product Market fit for ecosystems providing a settlement layer for other blockchains ethereum is not built for apps like Sal

is that's the key thing that I think people don't realize salana is building for apps ethereum is building for chains okay ethereum is built for blockchains IE l2s and there will be many blockchain ecosystems some will be private ones whether that's for Banks or financial institutions some will be public ones like we already have some will be app specific like we already have like flip cart just did and some will be general purpose ones like arbitrum and optimism right and companies like coinbase like okx like Kraken like flip cart like immutable and many others are building ecosystems not apps they don't want to build on salana because they want to build their own ecosystem and so the

choice of companies that want to build an ecosystem and think about how many companies in the web 2 world are building ecosystems Zoom open AI Amazon Apple Google all the biggest companies in the world are building ecosystems Tesla right where other developers build on top and the thing is is that if you want to build an ecosystem for whatever reason mutable wants to change web through gaming so they need an ecosystem not an app so they can't build what they want on salana right and so for example immutable is building infrastructure for web through gaming and they need a web to like ux what that means is they can't have any gas fees and so they can't do that on salana right unless they build an L2 on salana but right now that infrastructure doesn't exist and so what

they need to do is build an L2 on ethereum so they can abstract away gas fees abstract away wallets and have a web tole experience and they pay the gas fees for all of their apps and all of their users right that's where the future is going of blockchains no war gas fees right and the reason that people want L2 or sorry company want l2s is because they have the ability to be flexible and change the functionalities of it whether it's abstracting away gas fees whether it's having private transactions whether it's having zero knowledge proofs whatever it is that they want to do for their specific ecosystem they have the ability to do that as a layer two on ethereum and not have to worry about the complexities the costs and the risks in having in hosting

your own blockchain that has its own security that's very difficult to have your own token to figure out how to make that thing sustainable to get validators blah blah blah blah blah that is so difficult barely anyone has been able to do this successfully right and so it's very difficult to do that and so what's happening now is people go oh I don't have to create my own chain but I don't want to build an existing chain because I need my own features and so I can just use an L2 and I can spin that up in a matter of days that is the future and so one thing I want to say is there's going to be hundreds of companies that are R require the same flexibility and so yes currently there are users all over on different l2s and it looks weird to

people there's a new L2 launching every single day and there's liquidity all over the place and bridging sucks but that's all getting fixed we got to remember one thing we've only had LT for less than two years right uh but for most people in the world that 99.9% that I talked about they won't use blockchains like we do now most people in the world will never Bridge they will never Farm an airdrop they will never have to like use a metamask wallet they will never do any of that stuff they will just use an app just like when you use friendtech right where you didn't have to get a man wallet the wallet just existed in the app itself and you just went and used it you never had to do any of that stuff and it'll feel like a normal Web Two app and so like just like

when you use FanDuel or DraftKings or you use PayPal you open up the app you create an account maybe you had to send some money in there so you can start gambling or you can start paying using PayPal whatever same sort of idea where it abstracts away all the stuff underneath and so bridging will not exist and yes so sorry bridging will exist from one from one L2 to another but it'll happen automatically under the hood you won't have to do it yourself like you have to today and so liquidity and users will not be fragmented they'll actually just be composable and this is the world we are already entering the L2 ecosystem and so funny when back in 2017 when everyone was launching tokens everyone was like why do we have so many tokens we don't need this many tokens

right we've got Bitcoin we've got eth we don't need more tokens and then what happened now we have tens of thousands of tokens and that's like the whole normal part of this ecosystem the same thing is happening I think with l2s r's like why do we have so many l2s we don't need l2s and it's like no no we do need l2s every company wants their own ecosystem and so we're gonna have a ton of l2s and that's the norm so this is product Market fit for us Year we're seeing it happening in real time but most people just can't wrap their head around what that is and so I think it is a big moment for Ethan this is why I'm not fading the fundamentals I think the fundamentals are very very strong for e theum at the current moment damn Mike drop what a take if you guys aren't

following Kai on Twitter X you need to be following this guy at Kyle readhead I'm gonna show your Twitter for you right now Kai we'll throw the link in the show notes make sure you follow him uh because he's got some great takes I'm bullish on Kyle in 202 more than ethereum always always Kyle to Kyle f with hat f with hat I like that okay okay let's keep rolling along next story what's going on with inscriptions what the heck are inscriptions and why are they taking down so many blockchains and having such an effect across the ecosystem yeah we

won't get too deep into what inscriptions are because we we've talked about them previously uh but you could think of inscriptions similar to that of an nft except instead of minting an nft uh via a smart contract on a blockchain like we do currently it is basically basically in a typical swap like a typical trade you would do transaction on chain you can put like data inside of that thing and so you can put an image in there and all of a sudden mince it on chain but only for the same cost as it would be to like do any normal transaction like sending eth on ethereum or aack on Avalanche so it's a very cheap way to put data on chain that's what Bitcoin ordinals are and that became a big thing and so all of a sudden we've had this camr explosion of

people doing this on every chain and the thing is because it's cheaper to put images on chain you can do a whole bunch of these and so they start to clog the the chains because they get so many transactions and so it's it's a bit weird the reason why it's not as good or why I would say it's not as good is you don't have any functionality so the reason that minting an nft as a smart contract is great is it's a smart contract which means it's programmable and you can do things with it like unlock access and do all the other great things we always talk about that talk about with nfts you can't do any of that with inscriptions so it's literally just you put a picture on blockchain and then it's just that's it it's done so there's just not really a point in them other

than putting something on a blockchain so it's mutable yeah other than a mutable an immutable piece of art or anything else that you want to make immutable that you never want to change or use in any other way they I actually just want to clarify I'm not saying that it's useless or not useful there are use cases for it but for most of the things we've always talked about MTS this isn't that so there will be inscriptions this is a thing now it's going to be a thing in the future don't fade inscriptions but it doesn't mean nfts are now gone we they're just it's a new primitive on top of blockchains but just very different than one n is but also related to images which is the thing I want if you were to if you were to like put this on like a

like a chart inscriptions have limited use case nfts have millions of use cases beyond what we can even imagine right now because there's going to be things built with nfts that we don't even know about yet nfts or ethereum or salana inscriptions are Bitcoin there's your way of understanding it yeah can't do anything on bitcoin but you can do a bunch of expressive things on Smart contract platform so here's here's what happened in the last week as a result of inscription Mania we got memec coin Mania going on we got inscription Mania we might have a couple local top signals Happening Here Kai but first arbitrum went down for an hour yes arbitrum was down because there was so many inscriptions being put on chain you

don't me description technically I guess you kind of do that it took down arbitrum for an hour then avalan was being overwhelmed and in four five days Avalanche users paid over $14 million in fees for inscriptions that's crazy that's way more in fees than people would normally pay on Avalanche I got a chart up here to show the percentage of inscription transactions across chains so you can see that Avalanche was over 90% no Gorly 65% arbitrum 62% ZK sink era 58% polygon 40% Phantom 32% so you've got just massive inscription volume

happening across all of these chains and it's obviously having an effect on all of them because they're all getting clogged up they weren't prepared for this they weren't built for this so there's an impact and it's going to I don't think this is going to continue long term I think inscriptions as you said have a use case and I think there will be people who lean into that the same way Bitcoin ordinals are continuing to grow but I think right now this is a fad and a narrative that is just caught fire that will not continue throughout the bull market but I I'm assuming what you mean is not continue on this growth trajectory exactly they will exist they just won't continue on this growth trajectory my assumption but we also

said that when Bitcoin ORS come out and now that growth trajectory is taken off when you count for all chains but yeah right now just bought like it's there's go to the chart that shows how many inscriptions this was the polygon CEO or founder who has a a chart here a table there's been 161 million inscriptions on polygon 77 million on BNB 60 million on Avalanche and so on and so forth so like these are just Bots that are just in scra like couldn't have humans doing this many it's insane numbers it's a wild ride it took down arbitr didn't take down Avalanche but it became almost unusable it was like it was basically more expensive than ethereum to swap on Avalanche it's like 15 bucks and then but polygon remained sort of low its fees and has managed this 161 million I

guess do we want to dive into that a little bit further Jay what do you think sure you want to talk polygon and but sure share a take on on polygon and they're sort of showing off and uh yeah the one thing I don't really love here is s deep who's the founder of polygon so he's he's on Twitter bragging right now that polygon has been able to handle the 161 million inscriptions and basically saying like our chain has been so great we've made all these amazing upgrades that have allowed this to happen and you know other chains are not doing so well through this which I just think one like you shouldn't be bragging about that you shouldn't be like trying to put down other the chains and saying saying these kind of things as a leader just doesn't really make sense but also it's like

polygon is not an impressive technology at all polygon proof of stake their other Technologies are they layer tws their zks whatever but polygon proof of stake is just a copy of ethereum with a hundredth of the amount of validators a thousandth of the amount of validators and so it's just a it's basically a database and so like you should be able to handle this many transactions you have 180 validators that's it and you've basically haven't done much to polygon versus what ethereum is other than increase the block space completely centralized it so like you're basically a database like yeah you should be able to handle this stuff you don't have anything Innovative here now Solana handling this is a whole different story that is a decentralized platform that is running very different than something

like ethereum and it is handling it no problem and they've got parallelization which is like making priority fees in certain areas of the chain like they're doing some really cool things here polygon has not done anything you just you just have a really cheap centralized chain and that's nothing against polygon per se they are rolling up to pnl2 I think that's going to be an amazing technological feat to do that so like still bullish in polygon but just like I don't know people are just bragging about metrics that just don't really matter and that kind of annoys me okay let's go over to what is exciting to brag about is our friends at privy just announced Global wallets Kai what is this yeah so this is actually goes along with the stories of what I was just talking about about layer 2's of the fragmentation and kind of everything

being all over the place if we think of frch which is kind of our best example of a account abstracted away like blockchain abstracted away app not perfectly but a lot of things were abstracted away if you've tried fch and the reason that worked is they had embeddable wallets and so meaning you just log into an app like you normally do with an email phone number like whatever and that app has an embeddable self- customy wallet within it now that wallet can't go and interact with other apps it only works in that one app and so when the quid is in there it just stays in that app but you have a back door you have the ability to um basically retrieve your private keys and move it over to something like a metamask that then could connect to anything else so that's the key thing is

it's great it's still self- custody you still own your assets and you can pull out and do your own thing at any point that you want the so this is has been an incredible innovation in our space so French does this Blackbird does this just a bunch of other apps that are beginning to do this on Bas and and other layer twos something we really really need but the problem or somewhat of the problem is now you have sort of this like how many wallets you g to have it's kind of like today we have a 100 apps and so I have how many logins for every single app and sometimes like in some we don't have a lot of apps that require money inside of them in web to usually you just connect a credit card but something like a fanuel DraftKings you do put money into

them roblocks you put money into them and it's just stuck in there what's really cool is what priv privious build is global inedible wallets which is a way to actually connect all of your embeddable wallets across these apps into one wallet and so now you can start to control the assets and move the assets from these wallets from one one ux essentially one interface and so instead of like you probably forget what all the apps you have and what all the embeddable Ws you have you sort of can link them Al together how it's going to work I'm not fully sure yet it launches in q1 of next year but they are basically trying to solve that next ux issue of okay we're gonna have edible Walts that's a for sure thing it makes

complete sense now what do we do about connecting them all make them all interoperable that's what they're solving here with global embeddable wallets so this will be a big thing I think you'll be able to do this with Blackbird front Tech and others and so that's going to be really exciting yeah shout out to Henry and the whole privy team we had Henry the founder of privy on the podcast a few months ago if you want to dive more into understanding what exactly they are building go check that episode out it's a really good one okay Rolling Along while we're talking about privy friend Tech which used privy embeddable wallet just came out with a big announcement two days ago this was their announcement of V2 coming in Spring 2024 I don't know if you watched

this video this was like a tap poop video of a singer singing in Korean and then like Po a poem like an inspiring poem that was overlaid over top of the video about basically what happened with friend Tech how they they came out and they didn't expect it to be so big and then it was so exciting and now they are really excited that they're working on B2 they also kind of reminded everybody that this was all beta up until now which is pretty crazy when you think about the numbers that they achieved now at the end of this video is where there's some hints of what might be coming with V2 there's four icons on the screen that they end with I think that I mean the last two are

really obvious nfts they're going to integrate nfts they don't have nfts currently they p is obviously points they're going to have points I mean they already have points yeah and they talked about an air drop coming at some point so oh so it's the end of points and maybe it's the air drop time that's kind of what I'm thinking you know maybe it's their first airdrop and they go to blur model and that's season one right then the keys and the multiple keys I got to imagine that's something about you know embeddable wallets and the way that you manage your money I'm not sure well though Keys key they already have embed wallets but keys are the shares right that's what they have they use Keys that's what when you bet on something you're betting on a key the multiple Keys is maybe you could have multiple

counts maybe it's not just Twitter accounts you're connecting now or maybe your chats can be grouped like me and you could have a together other key and so like someone could buy an index of keys where like you buy you and I and we're like a you and I can chat in that and people can be a part of it maybe I don't know that's what I'm thinking but it's hard to say who knows either way I mean I I wonder if I'm assuming front dech is bigger in Asia is probably why they went the K-pop route of their branding I I don't know if that's true but I'm just assuming that but fun fact frch is the second highest revenue generator of any app on any chain this year so pretty impressive second to open SE which was a little bit wild now if we

have up on the screen here our Dune dashboard of frch and the volumes have gone way way way down the revenues are are way lower where is the revenues in here I wonder what they're making on a what is this a weekly basis I think weekly protocol fees there you go 187 187,000 last week that's still pretty damn good I think they only have a team of like I don't know four or five people so they've made over $50 million since launching in August or sorry what's that 26 million 26 million I've seen as high as 40 million that they've made uh well it's because 26 million went to friendch 26 million went to creators they've generated $50 million in value but half of it went to them half it went to the

creators so quite impressive to say the least and um I don't know like I don't use it anymore but I I do think I'm I'm very bullish on social F and what this is going to do so I'm excited to see they do next the other take that I saw that I liked was that well friendtech has decreased substantially in terms of its active users from you know they were up 20K per day in the hype down to under a thousand now they basically turned into a quiet Farm because a lot of folks have parked their eth there because they're they don't want to miss out on a potential airdrop that's coming in 2024 so we'll see what happens with V2 they need to lower their piece because no one

wants to trade out there anymore because it costs 10% to every trade like every time you do it which is just that doesn't make any sense okay let's go to our favorite new segment in the show agree disagree or explain first up here got a tweet from Millie or llama on the brink they say in all my years in crypto I have never seen vitamin that's referring to vitalic or Justin Drake or even Joe L and brag about onchain decks nft or stable coin transfer volumes much less a marginal rise in such metrics meanwhile that's literally all the soyana leadership cares about fluffy metrics let's on board the next 100

million users there are no Moes once a user knows what a seed phrase is they said as they hurder users to the only two closed Source wallets available for the chain they literally don't care about anything else in crypto except metrics so heavy heavy take by Millie I disagree with the ending part of it I do agree with the first part of it which is vitamin or metallic Justin Drake is like one of the core devs of ethereum Joel luin is the founder of consensus you don't ever see them pushing metrics and the only reason why I like them saying that is last cycle for those of you that weren't here there were a few actors that were the leads of blockchains that did really really really well in the

early days to the cycle and they became these like Twitter trolls bragging about every most confident people in the world and those names were who Sam bakman freed do qual suzu Kyle Davies if you don't know who these people are they are all in jail every single one of them also the founder of Cel like all of these guys were getting so like bigheaded and and bragging and so I understand the take here which is those that stay levelheaded like falic always has tend to be better leader ERS and can produce better people within an ecosystem which is very important it's like if your CEO is just nuts maybe that's not a good thing um not saying any of these people are CEOs but all that said I don't mind the Salata team

doing this they needed to get loud they have done an incredible job and so like they also were basically thrown in the in the pit earlier this year and were like left for dead it's like I don't know give them a little bit of bragging rights they've done a great job to come back ethereum people not the ethereum leaders did this in the last cycle too when everyone thought they were dead it's like I don't hate it yet I do think anat who's the founder of of salana is a very good guy and seems to have like his head on the like on his shoulders but I will definitely watch closely to see if they if he changes but so far I think he's just a great dude and one of the best leaders in the space and I put them up there with fatal so like I don't

agree fully with this take I like that was a that was an agree a disagree and an explain on that one okay next up cryp this is from imperior osmo crypto is a game of narratives in just the last month we've gone through l2s gaming rwas memes l1s we're now on to evm parallelism with SEI parallelism say it with me Jay parallelism parallelism this is a tough one it's a weird one I agree with this completely crypto is fully a game of narratives I wrote a bunch of reports over the last like month or to in Pro of how to build your portfolio tips for the bull market Etc and there's nothing more

important than just like getting your bag set before the stuff goes crazy and then just the best thing you can do as an investor is do nothing right have your bets placed early and then just don't do anything if you can walk away for the next two years and come back next year and then you can sell U because people just Chase narratives right remember crypto is the only place where retail investors can get in on things that are don't even exist yet you don't need to be in credit investor you don't need to wait for things to go public they just anyone can post anything and you can do whatever you want and most of these people also live on social media because we're all young and so narratives Drive everything the moment this whatever narrative picks up everyone just moves their money there

they just don't care it's a bunch of degens and so if you can be ahead of those narratives you can do extremely well but most people are not ahead of those narratives so you end up being exit liquidity for those that are creating the Nar I mean I I saw this happen all the time last cycle I got caught up in this last cycle too thankfully it wasn't wor a ton of money um but definitely something you want to be careful of have your conviction and just stick with that don't try to chase these narratives because it's all game it's amazing how easy it is to do well in investing if you don't [ __ ] it up but it is so hard not to [ __ ] it up like it's wild how you hear people say that leading investors

say that all the time time Kai you wrote a report where you literally said don't [ __ ] it up as the title of the report because that is what most people will do so don't get caught in the narrative I certainly got caught in the nft narrative in the last cycle and I got wrecked on nfts and I'm not making that mistake again so okay we've said etheria was one of my big conviction plays and I think a lot of people that listen to this podcast are the same and so a lot of people like should I be jumping ship right now and it's like dude you're up 85% on the year it's not so but it's like I know Sal's up 700% but no one put their whole bag in salana when it was at $8 so like again these are just like its

perspective and people just think oh my God I missed out on 700% it's like no you didn't almost nobody got that 700% and no one got their full bag on that 7 100% I know but then people go and calculate they go well if I had all of my eth in that in January when it was this price like I'd be you know have a million dollars now and it's like dude you still are up 85% and it's probably going to go up another however many X next year like you could still do nothing and you're going to beat almost every single investor in Trad fight world and still do really really well and like quadruple 5x your money and you literally don't do anything and you didn't choose the best asset like instead what people do is sell it and they'll go buy the next whatever coin

that then they get dumped on and they end up losing at all it's like dude you missed out on an easy 5x you were already in it there you go out so we got we got an agree here and speaking of not being somebody else's exit liquidity here's a take from nft stats bu reminder just cuz Bon became a multi-billion dollar token does not mean you should provide exit liquidity to the next three hundred meme coin people that say they have the next Bon completely agree on this one what's actually funny though and I do rul who's our content creator our Twitter guy our tweet Tor he showed a video of you and I from forget when it was months ago of us saying that Bach was going to go to zero

or something like that and obviously we were completely wrong uh so I just want to do a self-pity admit that we we definitely missed the block train but uh I don't really care sorry to anyone who listened to that but 100% like for the most part if you're foming into things that have gone up I forget what Box's gone up but it's something like 20 40 yeah yeah uh then you're probably gonna be exit liquidity and just again if you don't know what you're investing in and you don't know why you're investing and you don't know what you're going to sell it at probably just don't do it let's be real that is not part of our thesis we said the same thing about Pepe we also said that Pepe was going to zero and it went up a lot now here's the reason why we say that well there has

been a Pepe and a bon that have gone up a lot there have also been a ton of meme coins that did go to zero so we are here to protect you from going to zero maybe you might have missed out on that 140x but would you rather have some money that is safe and is going to do well throughout all this or would you rather risk it all and go to zero like that's your decision you know and if you're a complete djen go for it but the risk is too high in my mind yeah yeah not for me either you gotta have conviction in small things and just like in a few bets and and go with those otherwise like you gotta be okay with missing some that's fun yeah that exactly it don't get

caught in the hype and the fomo okay that is a wrap on today's show this is the last rollup before Christmas we will not be doing a rollup next week because rather than doing the rollup we're coming at you with our 2024 predictions next Friday so still tune in we're still putting out podcast next week as we usually do but with a little bit of a shift we're focusing on a wrap up of 2023 coming at you early in the week that's Tuesday next Wednesday we got a wrap up of 2023 markets Kai is going to take a look at what happened in the markets and what that means for next year and then Friday we've got our 2024

predictions if you aren't subscribed to our newsletter make sure you subscribe because that's where we are going to continue to keep you up to date throughout the holidays on everything that is happening in the space thanks so much for being here everybody thanks for supporting us in 2023 we're so so grateful for that happy Hol yeah Merry Christmas happy Holidays happy New Year excited for 2024 Kai how you feeling about this year and the coming year well you're going to have to turn tune into the market watch next week and I'll tell you how I feel about next year actually no that's in two weeks I'm going to do a 2024 we have 2024 predictions next week and then the week after that the market watch is looking at what I'm thinking for markets so you're G have to tune in to all these episodes we've got we got a

bunch of good stuff you're just teasing us always teasing us appreciate every one of you for listening in if you have a minute give us a like give us a follow follow on whatever platform you're on give us a comment those things really help this podcast grow and us reach more people as we onboard people into this space and we all grow together have a great Christmas everybody happy holidays thank you for listening to web through Academy your one trusted source to capitalize on the next big phase of the internet if you enjoyed this episode please share it and subscribe or follow so that you don't miss the next one while you're at it there's a link in the description for our free newsletter where we provide timely and relevant web3 insights so you can confidently

build and invest in web 3 make sure to subscribe today one final note this podcast is for educational purposes only and nothing we say is financial advice crypto and web3 are risky and you should never invest more than your willing to lose thank you friends and see you in the next one