Crypto Is Running Out of Reasons to Go Lower

Transcript

Bankless Nation, it's the third week of July and for the third week in a row, me and Ryan go over the question, have we bottomed yet? We got some extra data to talk about. Inflation is coming in cold, but the Iran war is coming in hot and also we've got some drama over in the Robin Hood base Ethereum complex ecosystem. Uh, I think that's the big news of the week is that Robin Hood chain has passed base in activity and as a result of that things are just things are changing. Times are changing. It's a new it's a new bull market. So, time for time for some changes.

>> Yeah. Well, I don't know if I'm ready to call it bull market, David, but there are some changes that I feel are downstream of Robin Hood chain. One, it might be actually, and this is somewhat bullish for ETH Maxis listening right now, is some movement, positive movement for ETH on the ratio. There's a question of whether that is Robin induced. Maybe we'll we'll explore in today's episode. How about that? There's also um Jesse from bass, founder of bass saying uh all first quarter he's had >> creator of bass I think is his preferred title.

>> Okay. Creator of bass has been eating [ __ ] Those are his words, [laughter] >> not mine. >> Talk about what he means. But this is a base [clears throat] pivot. We'll talk about that. And also, there's a new resurging question again in the Ethereum ecosystem, which is, are the L2s paying enough rent to ETH holders? And does >> Wait, I've never heard of this question before. >> Have we ever talked about this [laughter] before? >> It's kind of like the perennial question of have we bottomed yet? We're going to talk about >> There's new stuff to talk about there. There's new stuff to talk. >> Yeah, including Plenty is back. Do you remember Plenty?

>> Famous L2 bull. He back. They are back. mythological creature in Ethereum lore. >> Yeah. With a hot take. Uh so we'll talk about all that and more. But why don't we start by looking at this chart. When you look at this chart, Ryan, what what do you feel? >> What do you feel? How does this make how does this chart make you feel for for the listeners? We are looking at the four bull markets of old in Bitcoin. 2014 2018 2022 2026. >> You it's sectioned off into four sections of each of those things. So you have the the bear, the pre-bull, first bull, and second bull. And it all lines up. It all lines up pretty well. Again, this is just a cycles playing out. And if you believe in this chart, what this

implies, we're basically towards the end of the bear. Not we're not at the end. There is a chunk of time left in this aligning of the seasons, aligning of the cycles for some shenanigans to happen. And so I think that's the question to be asked is like in this remaining two quarters of time, the rest of this year perhaps, what do we think happens? And it's like I think the big question is is it a slow grind to the right? It's just a flat grind or is there a final capitulation leg? We've just been asking this question every single week on the rollup. I'm in the camp of it's a grind to the right. Well, I mean I I think like um you asked how this chart makes me feel and this chart makes me feel the thing I have been feeling for the last

12 months is that like >> I I need to get this tattooed somewhere on my body. >> Never fade the cycle. >> Every time you want to fade the cycle in crypto, the cycle repeats and this is just a fourth instance of the cycle repeating. That's what this chart is saying. So the clearest indication of what's going to happen is what happened the last three times. And that means we're close to a bottom but have not yet bottomed. And so I think the answer to the question is have we bottomed yet?

Almost. That's that would be my answer to the question. >> But not yet. But not yet. But not yet. >> Not yet. And it just follows exactly like this. This I I believe in this chart. I believe very much in this chart and I think it's going to play out the exact same way. So we're talking about a bottom in probably two 3 months and then sideways for the next year sideways up and then we re rebuild the base and then we have a okay 2027 a fantastic 2028 and then it just repeats again.

>> Yeah. there. It would be poetic for there to be a bottom in October. Like one year after 1010 is like the actual pico bottom. I guess I'm trying to be a I'm trying to negotiate my way into the cycles not being a thing. And the way that I do that now, >> why do I just capitulate? >> I say that instead of there being a final capitulation wick in October, we just we're already there. We're just grinding flat for the remainder of the year. Wh I don't know this because the it's too magical for the cycles to keep on repeating. That's too much magic.

>> I mean there's it's okay for magic to exist in the world, you know. Um that's why I'm seeing the Christopher Nolan movie this week because he is a magical director. He brings magic to his movies and that's okay. I know every single movie I see from him is going to be like pretty solid. >> Magic can exist in the world. Things >> we were talking We were talking about the Odyssey right before we started recording. That's why I'm going to see it this Friday. I just wanted to inject that somewhere in the in the seeing an IMAX. >> Of course, that's the only way to see it. Got to do it. >> All right. Well, Ryan Ryan believes in magic. That's the takeaway so far.

>> And I believe in four year cycles. Uh how about Brian Armstrong? So, he uh put out I think a poll on this. >> We're looking at it right here. 31,000 votes. 44% said yes, the bottom is in. 55% said no, the bottom is not in. Now, of course, Twitter is just a sentiment check. Pretty split though. Pretty split. I like I like the tweet from a from good Alexander where he goes, "Bitcoin can't go down with a war and Michael Sailor selling. Zcash can't go down with a day zero privacy bug discovered by AI. ETH books Robin Hood after Vitalic disavows gambling as a use case. The night is darkest before dawn.

Bitches." He's basically saying like, "What's going to send us lower? There's no We've got nothing to send us any lower. Like it can't be done." we might as well go up. >> But that that's how cycles kind of end with seller exhaustion, right? >> So this is just saying >> there's seller exhaustion. What's the worst that could happen? >> I I I do think some worst things could happen though. >> Probably not in Unwind, but if you if you had a major stock selloff, >> I we're seeing a little bit of a sell-off today, but that's a tiny micro selloff. If we saw a 10 to 20% um NASDAQ selloff from here, things could still get uglier. I mean, that could be a final capitulation bottom.

>> Yeah, you can see. Okay, so here's the We're looking at the charts right now. So, you can see here's the Iran war conflict and then the absolute monster rally and then we've just been kind of ranging at the highs. You can see if we like if we went down, I don't know, a modest 8% from here, there's no way Bitcoin would be above $50,000. >> You're talking about the NASDAQ. So, if we went down to what, like, you know, 26K, something like that. 20 below 27K. So we're at 29K right now. If you've been below 27K, which would bring us, you know, down 7%. Yeah. Like Yeah.

Bitcoin Bitcoin is hitting an alltime low, but or not an alltime low, a cycle low. >> Well, for sure, >> but not but not that that much. >> Yeah. I guess I guess we'll check in on the bottom again next week. I mean, part of the reason we're asking this question is cuz cuz crypto was up a little bit and uh was it up partly due to inflation news? So, we had some positive numbers on inflation, which means inflation was a little lower than analysts expected on the monthly. >> I would say it's it's it's a decent chunk lower. So, here's uh the summary from the Kobe letter. June CPI inflation falls to 3.5% below expectations of 3.8%.

Core CPI inflation fell to 2.6 below expect expectations of 2.8. Month overmonth inflation fell 4%. biggest monthly drop since May 2020. So, we started this week, we knew we were getting these numbers this week uh after last month. It was a little bit higher than expected and there had been discussions about near-term rate hikes happening this year, which really spooked the market and then these numbers came in like significantly below expectations with inflation. So inflation is coming in real cold and I think everyone in the market who is positioned with risk like myself and basically probably most of the listeners all just breathe this sigh of relief like oh ph we I can hold on to

my risk on position. >> Well it's interesting though like of course this is annualized inflation. It's somewhat of a a lagging indicator because on the other side we have cold inflation numbers. We have hot Iran news it seems like and since the beginning of July uh oil is up 20% in July that's going to be reflected at some point in future increases in energy prices right and that will be reflected in CPI at least uh yeah in some measure so it's sort of interesting we got lower CPI numbers but energy prices increasing on the week and certainly the war has continued to intensify I think last week we played play a a clip of Trump saying what like it's over. I'm not talking to

these guys anymore. What was his exact cooks or something? Yeah. >> Pretty pretty pretty aggressive words. >> Yeah. So, what's what's the um the update on the Iran war? >> Yeah. Okay. So, today the time of recording Thursday, fifth straight day of US strikes on Iran, targeting Iranian command centers, air defense sites, missile and drone capabilities, and coastal surveillance facilities. All kind of the same words that we were using last time we were doing this. All of the goal is to attempt to reduce Iran's ability to disrupt shipping through the straight of Hormuz. So we're just trying to brute force Hormuz open.

Uh there's a a quote from Trump that I thought was worth reading. The memor memorandum of understanding with you're dealing with sleas bags doesn't mean much. And so he is positioning theou that they had with Iran as like kind of a test of Iran's commitment to the memorandum of understanding. Do we have a memorandum of understanding? Now, there's a quote out there that Iran's never won a war, but they never won a war, but they never lost a negotiation. Iran's very good at negotiating. They've negotiated the hell out of their very terrible position that they're in with all the previous presidents. And now we kind of know that and Trump knows that explicitly. And so because they were trying to overextend themselves in the negotiation phase based off of their

very little leverage that they had, Trump was like, "You guys have no position, so I'm going to send more bombs because I'm not listening to you." And so that's kind of kind of where we are. Um Donald Trump informed Congress that we are resuming military action in Iran. So that was a part of the War Powers Act that mandates the president informs lawmakers within 48 hours of launching a military attack. So according to Trump, he has now 60 more days of a free reign to have a conflict in Iran cuz he's not counting the last conflict in Iran as the same conflict.

So now we have a new second conflict in Iran. Not the the first one is a different one. Uh and so we'll see how that stands out. But as far as things go, that's just where it is. How does this stop? Will this ever stop? Like so I like it's a it's too it's an unstoppable force meets an immovable object because Iran is up against the ropes. Uh and so like and again the nuclear effort by Iran is ex existential. It feels existential to Iranian sovereignty the the the regime sovereignty. So they cannot give that up.

>> Sure. >> Uh but then Donald Trump is like well I'm not allowing you guys to have anything. And so it seems to be that we're in a between a rock and a hard place of Iran needs to keep constricted the straight of hormuz because that's their one defensive maneuver that they have is to increase energy prices across >> and you said they didn't have leverage but they do have leverage there with the straight of Hormuz, right? I mean the >> we're doing we're doing our best we're doing our best to like disrupt whatever control that they have. >> It's so US Central Command announced on Monday that it would resume the naval blockade of traffic in entering and exiting Iranian ports. So, uh, oil was flowing out of Iran and into and money was shipping into Iran, uh, since this, uh, peace deal had been signed. Uh, that

was lifted on June 18th with the peace deal, but now is reinstated. >> I mean, it feels like we're pretty much where we were a month ago then before the memorandum of understanding. >> Yeah. Yeah. The situation, the economic situation in Iran is decaying. They they don't have much economic view. They they're on the ropes economically. And now there are once again protests. There are small incremental protests emerging in Iran. You know, we'll TBD if they grow into anything. But you could imagine that if you have the US military on one side and then another wave of uh domestic protests on the other, like Iran's in a worse and worse position.

It's just not moving quickly in any direction. But economically, they just don't have much of a lifeline. >> Difficult to see though with um like these actions and end insight. like it just feels like it could go back and forth, back and forth for some time, for weeks to come, for months to come. >> The words forever war have been uttered frequently, more and more frequently this week specifically. You talked about the oil prices. So, the oil prices came down from the middle of the Iran war oil price range. We'll call it $95. Just kind of picking a middle of the curve.

>> It fell down 28% almost 30% to $66 at the very start of this month. And now since resuming conflict, we have gone up from $66 to $78. $78 oil is still the cheapest oil during this Iran war conflict in total. And so we're below all previous oil prices for the entirety of this like conflict. And a part of that is just because there the market has had time to route around the straight of Hormuz. And so you know buyers are buying oil elsewhere. United States is pumping more oil than ever. uh the the Gulf countries are shipping oil away from the straight so they can just ship it outbound elsewhere and so the market has been has been given time to

rebalance itself and so I don't think we're ever going up to like high high oil prices ever again just because like the the time is on the United States side here >> so we are recording on a Thursday this episode comes out on a Friday so listeners will have already heard this but Trump plans to address the nation uh tonight so that news will already be in and there's question what's it going to be about is it going to be about the the the war. Is it something else? Um, election fraud, uh, assassination of uh, Lindsey Graham are in the notes. Like, I have no idea what all this is, but it's Trump, so it'll be something. Uh, David, can we check in on some of the other prices? So, >> I know we're down a little bit at the time of recording, but other than that,

I mean, Bitcoin, Ether, they have had pretty good weeks. Where are >> I would say that we had a very good week on on the crypto side of things. I I think people people were noticing this on Twitter this week. There was unique strength in crypto assets this week because there was there was not strength in the stock market, not comparatively. There was definitely not strength in the me memory stocks, which is like the other big speculative bubble that's happening, but there was strength in crypto. So, Bitcoin was up 2 and a half% this week. ETH was up 8% this week. So, not only did we have unique strength in crypto, but we had unique strength in ETH as well. The ratio, the Bitcoin Ether ratio is up 16% since the start of June.

>> Wow. >> I'm going to call the ratio, the ratio is edging at this present moment. [laughter] >> Uh I mean the ratio was way lower right before Tom Lee bought it. So it was at 018 back in April of 2025 in the absolute depths and then and then Tom Lee added 130% to the ETHBTC ratio and then we have retraced that 130% by 30%. So, we're 30% lower from the Tom Lee top. Uh, but since the bottom, we are up 8 18%. We're still kind of trending post we're trending down from the from the Tom Lee top. Uh, but like, hey, I'm watching it. I'm watching it.

>> You think that a part of this was Robin Hood chain and some of the traction? I know we'll discuss that a little bit later in the episode, but there's some energy coming from that sector of crypto and that is in the Ethereum expanded universe. >> Yeah. Yeah, the the Uni token was up 11% because Uniswap V3 and V4 are seeing very high volumes. Uh the Athena token is up 12% because Athena is integrated into Robin Hood chain. Morpho is also up in in double digits and so the Ethereum ecosystem defy tokens are definitely up.

So I think I don't know how else to explain the ETH the unique ETH price this week other than Robin Hood chain. So I think that's fair. I think that's right. Well, let's check in on uh Michael Sailor. And uh you also mentioned Tom Lee, so maybe we should check on him, too. So Sailor on the Week has purchased more cash. So he has more cash reserves. >> Last week we purchased cash. >> Yes, he's purchased cash with >> What did he sell? >> He sold his uh he inflated some micro strategy. So this is at the market sales.

>> He turned on the money printer. >> He turned on the MSTR money printer and bought it. was which is different from last week. So last week he was building his reserves. How much uh Bitcoin did he sell? Last week reported a few million, right? 300 400 million something like that. >> Yeah. Yeah. It was like some thou single digit thousands of Bitcoin he sold. >> Yeah. And this week >> maybe double digits. Yeah. >> This week what? Zero >> zero zero Bitcoin. He sold zero Bitcoin this week. >> This week this week he sold zero Bitcoin. And but he managed to raise uh 466 million >> by by by um inflating some MSTR which is impressive. I didn't know he could still do that. We thought he was kind of out of bullets but and he's never out of bullets is he?

>> He's he well he gets to do whatever he wants. So yeah, $466 million of MSR. They now have six uh $3 billion of cash. So have a $3 billion cash position that will give them 30 months of dividend coverage in just cash. Excuse me. Did I say 30? Yeah. >> 20 20 months. 20 months. And so I think if we go back to this chart, Ryan. >> Yeah. >> This chart 20 months >> gets him into the prebull section. That's early 2020. Uh not even not even it gets >> that gets us to 2028. That gets us into the bull market fully.

>> That gets us So so he has until the pre-bull to first bull section shift. You're looking at this picture. >> Yeah. >> Buys him buys him plenty of time. So who's bigger? Michael Sailor or the Cycles. >> Cycle is always bigger. >> Who's bigger? >> Yeah, bigger than the cycle. Look at the tattoo, man. Don't fade the cycle. Okay, so he's fine for the cycle. We're just assume that. Now, there's of course a bare take on this. Uh this Peter Schiff loves giving the bare take on anything Sailor does. By selling MSTR at a huge discount to Bitcoin value per share, you needlessly destroyed shareholder value just to avoid selling Bitcoin. Well, yeah, that's the point. That's uh >> I will say that that is a that's a bare

case for MSTR not for Bitcoin course he's not talking about that's actually bullish for Bitcoin >> and in a way it's not maybe as as long as you increase your Bitcoin per share I'm not sure what it looks like on the week but that that's the end goal that MSTR holders should actually want. Um the the bold take on this from Dylan is stronger credit, stronger equity, more Bitcoin by not selling it so it shores up their balance sheet. On the other side of things, I feel like Tom Lee is making miracles happen. I have no idea where he's getting this cash because it's not from preferred shares right now. It's not from kind of debt based instruments, but he has increased what he made a big buy this week. You said

every single day I get this notification. I don't know what you wake up Tom notifications when he's buying. >> Yeah, this is a telegram notification from liqu. It's just like a it's just it's a really good like kind of just feed of stuff that's happening on chain. >> Yeah. >> And like every single day it's like in the notification I see Tom Lee's face like I haven't I haven't clicked on the notification yet, but the bubble is up on my phone and I see Tom Lee's face just staring at me. >> So through all of these >> he bought more ETH. >> Through all of these purchases Tom Tom Lee is making every single day or like all the days that that David is waking up and looking at it, he now has 4.8% >> of all ETH supply. That's 5.77 million ETH supply. That is 96% of the

way to what he said he was trying to do was reach 5% of all ETH supply. He did this in a year and he's doing it during a bare market. And this is a quite a um quite a bare market for ETH holders in particular, right? because there's the feeling that ETH kind of skipped last cycle and uh Tom Lee is doing this and he is he's somehow raising the cash in order to get to his 5%. >> Pretty incredible. >> Yeah, pretty pretty incredible. Pretty pretty incredible. Um he needs to retract his 5% target.

>> What do you mean? >> He has to blow past it. >> Raise that. >> He has to He has to blow right past it. >> You want him to get to what? 7%. 8% >> as much as he can. As much Well, unfortunately, if he gets past like 33%, that's a huge problem. >> Oh, he's not 33%. That's in That's That's insane. That's >> He did F He did 5%. That is insane. We said five We said 5% was insane. >> I thought it was insane and he's done this, but I I I think it'd start to be uh diminishing returns and into negative return territory if he starts acquiring into the double digit mode. But you do think he should raise his target from 5% to something higher. It's just bearish for him to be like, "Okay, I'm done. I'm

not buying anymore." Yeah. I mean, this this could be an incredible investment for him, an incredible position to take if ETH does resume its ascent, which is uh to be determined at this point. But Tom Lee is >> I mean, I don't even know if it needs to do that. I think ETH just needs to track the crypto market and Tom Lee will do decently well. >> He'll do pretty well. Yeah, he'll do pretty well. But Tom Lee of course is also a fan of Robin Hood chain which we're going to discuss next. He said this about Robin Hood chain. One of the biggest crypto success stories of this year is the breakaway success of the Robin Hood L2. Dollar volumes have exceeded $1 billion in Robin Hood chain has now more trading volume than any other decks. I don't know about that

last part. I think you did some math on that. But uh we'll talk about that. I want to dive into the Robin Hood chain the the the waves it is making making. Talk about Jesse's quote of base eating [ __ ] Talk about maybe uh ETH tokconomics if ETH holders actually benefit from the success of Robin Hood chain and a lot more. But before we do, we want to thank the sponsors that made this episode possible. Trading is changing, not gradually. Right now, OKX just launched Trading Bots directly inside the OKX app. Grid trading, DCA arbitrage. You set your strategy once and it executes around the clock. No staring at charts all day. No manual entries. no missing moves while you're asleep. And for the first time, automated trading actually feels simple.

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refined metric for measuring usage basically, uh, from layer 2B, 117 user operations per second on Robin Hood chain, where just 93 on base and Robin Hood chain just of course launched just a couple weeks ago. So very quick ascent by Robin Hood chain. There's just there's just actually way more metrics that we should go into. Uh what's the number one activity on Robin Hood chain? Obviously memes. We know this. [laughter] Uh uh the protocol TVL, the number one protocol TVL is Morpho at $152 million.

That's because um inside of the Robin Hood app, you can get 7% on your dollars and in the background it's the DeFi wallet. It's Morpho on Robin Hood chain. Is that the Robin Hood app? The app or is it their wallet? >> App. Okay. >> The app. That is the only thing about Robin Hood chain that I know of so far uh that is integrated in the Robin Hood app is the 7% USDG deposited into Morpho. There's $152 million of that. Uh Athena, $110 million. Unis swap $40 million in Maple Finance, $30 million TVL. Uh and so pretty cool. Pretty cool.

And naturally uh all of the activity, all the user operations is very dominantly going to be uh memecoin trading. There is currently Ryan a pretty fierce competition to become the leader of a token launchpad on Robin Hood chain. Uh there was this one uh token launchpad that had dominance. They were the kings. They had won all the market share called Noxa and they were printing like $3 million a day, but they stopped because the team had political issues and they couldn't figure out how to split the pie fairly or something so they just shut it down.

>> Oh my god. >> And so then now now like the second places are are fighting. So now it's between pawns and flap and hood. fund are three contenders for number one. Uh but the th the throne of who is the number one token launchpad on Robin Hood, that's the current meta of like who's trying to figure that out. >> Does it surprise you that just like an established incumbent from Salon or something like Pump doesn't just enter and kind of dominate this? Like why is this spawning new token launchpads? I mean that's tech that we have already had. Yeah, you can buy Robin Hood tokens on Pump Fund, but Pump Fund is an SVM logic, so it doesn't port to the EVM, but there are there have been other

token launchpads like Zora and uh Flare that I'm kind of like where was the readiness to deploy? Where where were you guys? Uh but like also I do kind of find that like the fact that this completely organic and unprepared is for some reason bullish like it feels very Darwin Darwinian survival of the fittest. >> Yeah. uh and somewhat equitable I guess in that sense. Um and so we have two barometers now because we have two very big meme coins that are about the same size that launch in different ecosystems. So we have we have Anom's memecoin. Did I tell you about Ansom's memecoin?

>> Yeah, dude. We talked about it. >> Yeah. Okay. [laughter] We have Anom's Memecoin and we have Cash Cat. And so Cash Cat is like has been crowned the memecoin of Robin Hood chain. Cash Cat was what Robin Hood was going to be named or was named before it rebranded to Robin Hood back in like the early early lore of Robin Hood. So now we have Cash Cat and what's the market cap right now? Fully diluted valuation of $104 million. And what's the Anom uh coin that's atund $190 million. So in in the same ballpark as each other. One's a Solana memecoin, one's a Robin Hood memecoin. And in addition to that is like kind of a a fight between two different ecosystems. But overall, we have two meme coins about the same size

that launched around the same time at the market bottom globally. And so I'm kind of using this as a barometer of like a ecosystems, but b risk. And so if in my mind if these meme coins do well, it's it's a barometer of just like people are are on people are playing the games. >> It's also a fight, isn't it, between who's going to have the memecoin empire? Is it going to be Robin Hood right now or is it is it is Salana going to retain its throne? Yeah, I would say I would say that's right. Yeah, like if Robin Hood dominates Salana in memecoins, you would buy Cash Cat. But if you think Salana is going to dominate memecoins, you buy Anom. But the Anom's a little bit different because like a you have the one dude who's like responsible on promoting it where Cash Cat's a little

bit more organic. But that's kind of like the activity and just like Lipnus has going on. >> Downstream of this. I think related downstream. This is also a long time coming. Base, which is Coinbase's L2 and a competitor, comparative point to Robin Hood chain, has been on a path towards pivot for at least the last 6 months, let's say. Um, this tweet from Jesse Pollock, who's the creator of Bass, as you called him, um, lays it out very starkly, and this is the quote I was alluding to earlier in the episode. He said the collateral damage talking about this year how things have gone has been an exercise in eating [ __ ] He has a whole post about this. He describes the

first quarter of 2026 as a punch to the face. Um, what I got out of this episode was Jesse admitting that the social coin creatorcoin direction that Bass was going in and promoting both I guess on the platform the infrastructure level though that was a bit more neutral mainly up the app stack in terms of what the base app prioritized what he as a leader of the base ecosystem prioritized this whole creator coin direction he's saying that was wrong either it was wrong Web three social web free social >> either it was wrong because it was uh too early or maybe it's like wrong cuz it just like won't work but it was the wrong direction for the base app and

ecosystem. So the farcaster Zora base thing that was very popular last summer that Jesse was spearheading and that looked like it would be the next thing. He's saying that was the wrong direction. What we should have done instead was focused on internet of finance basically. uh the the money types of things, the DeFi, the per the trading, these sorts of money primitives instead. And so he's admitting that he was wrong. Also stepping back from the base app and uh Kobe is now running the base team.

>> So Jesse is going to be still involved in the base chain itself and the engineering development of that, but now Kobe is taking the lead on the app side of bass and is clearly going to be prioritizing per trading making this a very friendly environment for that sort of class of person. What did you make of this? >> Yeah. Uh I mean this the timing of this is absolutely downstream of Robin Hood chain obviously and Robin Hood wallet and so this is the the context of this is just because well why did Robin Hood do so well so quickly? No, Robin Hood has a gargantuan in of itself and so they were always wanted to have some amount of success on their chain, but like the timing of this seems to be just because it's downstream of Robin Hood success, which feels like B Coinbase is

like this should have been should have been our success and why wasn't it our success? Um I I'm Jesse when everyone was like yelling at him to stop doing the creator coin stuff, Jesse was like, I'm going to do the creator coin stuff. >> He was like, it's conviction. It's conviction. >> Yeah. And like I don't know, man. You've got to respect that to some degree. >> Yeah. >> Like he took a swing. It was a big swing. >> He he he took a very big swing and he didn't listen to anyone. He was like disagreeable founder, which is bullish. And so you got to tip the hat to that level of conviction. In hindsight, now that we have hindsight 2020, hindsight bias, hindsight privilege. It's like, dude, that was so skyorphic. Like social was web two, crypto is web 3, and crypto

is not social. Crypto is trading. >> Maybe. I mean, Jesse would still say, "Hey, the future's not written. You were just talking about a thing called uh what is it? Cash cat and Anomcoin. What is Ansom coin? Well, it's a creator coin. Like it's in the vicinity. It could remanifest. But I think your part you know point is taken. This this was a um highly risk like conviction type move and maybe it would have been better in a startup to be honest rather than kind of Coinbase. Maybe the argument would be like Coinbase should have done the safer play which is continue to develop the financial use cases for which it was known. In fact, um friend of the show Austin Campbell has a pretty harsh critique on this. Uh he said that base has been an outright failure and he

gives reasons why >> I know about that one. >> Yeah, a strong take. Um he gives reasons why. It's a long post. He said base was a distraction that harmed Coinbase itself. Coinbase is is not fixing what matters. Uh can understand issues. >> Yeah. He's basically saying that like >> um it's a different matter when you're competing against like Robin Hood and Charles Schwab and Tradfi, right? These are bigger boys than kind of like the former exchanges, you know, Gemini and Kraken. Like so you have to compete in different league. And just like asking the question, is Coinbase up to the task? And so far he's saying that Bass has been an outright failure. I don't I think that's going far too far. I mean,

>> that's too far. >> The tech works. This is not >> This is still like the third largest chain in crypto. >> Yes. And this is not >> Well, now it's fourth. >> It is a pivot away, but it's kind of like a pivot of the application layer. You can still use the exact same infrastructure. I mean, and keep in mind, Robin Hood's only been out for like what, three weeks, and we're already calling like, "Oh, Robin Hood won and bases fell." Like, that's way too soon. Like, we're getting way uh over our skis on that one. So >> that's a take that's going around as well. >> I will say that when Bass was launching, like everyone was very stoked about Bass, the chain. And why? Because Bass was going to get distribution from Coinbase, which is not something that any chain had ever had before, ever was

a centralized exchange or a big large retailoriented. >> There was Binance, there's BNB chain. >> Oh, true. Yeah, true. Which was also bullish. Which was also bullish. Uh, and so yeah, that's that's when we got base is just BNB chain for white people in North America. [laughter] Uh, uh, and so like Robin Hood saw that as like a free lesson. It's like, oh, well, if you have distribution, your chain is automatically bullish and people will come build on your chain because of the distribution that you're going to put on it. And so really, it ended up being a competition between Coinbase.com and the Robin Hood app.

>> And Coinbase.com has as an app has lagged Robin Hood. like they were always between crypto and tradi. You know, crypto lost energy in 2022. And so this was a race for Coinbase to put stocks inside of Coinbase before Robin Hood put crypto inside of Robin Hood. Uh and Coinbase has been somewhat slow. And so maybe to Austin's point, like Base was maybe a distraction, but I don't know, the company's big enough. You can go you can chew gum and walk at the same time. I don't know if that if one was really competing for oxygen versus the other. >> They'll figure it out and the chain strategy is there. I mean, compare it to like Inc. from Kraken, right? It's doing far better than that. So, I think there's a a strong base, shall we say, to build on top of. There's another question though that was brought to the

ecosystem as a result of Robin Hood's success, and that is the question of like, okay, like ETH price is going up, but the question is why? This was a tweet I saw fired around from an analyst at Arc Invest who of course owns a whole bunch of crypto assets including a pretty large uh share of ETH assets maybe through Bitmine some other mechanisms as well but he says this uh this is Lorenzo the Robin Hood chain is the cleanest case study of what happened to ETH's economics over time and then he goes through some stats since inception Robin Hood chain did 816K in revenue thousand in revenue arbitum the tech provider middleware takes 10% that's 80K of that $816K and then Arbitum then pays Ethereum for

settlement and so far they've paid $1,538 to Ethereum. So if you look at the margins here of like who wins, Robin Hood gets 90% margins, arbitum gets 10% and Ethereum gets 0.15% for data availability. And so he goes on, he says, "If your thesis is ETH is money, then Robin Hood building here is ultra bullish, more activity, more ETH collateral, more lindiness." He's talking about, look, a lot of ETH is being used in these use cases being bridged across ETH is being used as money.

>> ETH is is the trading pair with all the meme coins. It's good for ETH or at least net net marginally better for ETH than not having Robin Hood chain. However, he says, "If your thesis is ETH is a revenue generating asset, this is the ultra bare case because there's an uncomfortable truth. Um, Robin Hood was already going to build on Ethereum the whole time. So, you haven't actually won anything." He's basically making the case that um ETH, you could look at it this, you could say ETH is not collecting enough benefit for hosting a layer 2. He said a healthier split would be at least Ethereum captures 15% of this margin. So this is a a longtime question. Should L2s be paying more to

Ethereum? And that's where we got uh Penia coming out of retirement. Uh this is a famous L2 bull and poster from I mean started five or six years ago famously bullish on layer 2. the layer and it just kind of has gone quiet uh jaded from a lack of um quality applications being built in in the crypto ecosystem and and has fallen silent for a couple of years and Plennia just came out with a a um I guess an updated take on where where the crypto market is. What is plenty saying here?

The way I read Palennia's take was that there was uh there is a tension between the scalability of supply blockbased supply that exploded. Block supply exploded while demand for crypto kind of collapsed at the same time and that made it very hard for the ETH's money like model to to come to fruition. Uh and mainly because what did he say? Demand growth for applications has been negligible relative to the increase in supply for the last four to five years. Further, the demand curve has proven to be highly inel inelastic. Uh and so he he kind of stays with his original concepts and ideas. I don't think he really updates them, but he kind of

gives an account of just like well we did expand supply, but just demand hasn't really kept up and that's led to the economics that ether ether is at. Well, I I was I was >> glad to see this. Um, Plenty did admit that he was wrong about something. Uh, he said >> um, "My expectations for growth in application demand from 2021 and 2023 post have proven to be wrong." So, he was wrong. >> Industry felt that. Yeah, >> the entire industry felt this. But the core of his post is there are two paths for Ethereum right now and ETH value acrruel which is you could either subsidize transaction fees and simulate

application demand to better compete in the trillion dollar alternative store of value market. So ETH as a store of value asset in which case you don't care about fee revenue from L2s at all. You just care about ETH being used as money somewhere else. Or you could reduce the capacity drastically. So, capacity of L2 Blockspace, capacity of Blockspace in general to hike transaction fees and you play in the shrinking billion dollar transaction fee market and accept a $100 ETH as the endgame. Those are the two paths. Do you agree that those are the two paths, David, or do you think that's somewhat of a false dichotomy here?

>> False dichotomy. super false dichotomy because the whole premise and structure and pattern of the Ethereum system is always about synergies and synthesizing and collapsing paths down to the same path. ETH is money because of the fees and the fees if you like if you value ETH on the revenue model then yes ETH is worth $100 but that doesn't mean that that's what's going to happen in my mind. You want to maximize fees because ETH is monetized through through the fees. And so it's a it's a little bit of like take the two binary directions that you think are we are pointing in and put them in the same path and go down both

and do both. That's my attitude. I think though there's some truth in that you have to pick one or the other, right? It's like you have to pick one or the other to optimize for, don't you? >> Yeah. >> And so like the way you put it here is you said eventually at the endame for max um ETH value fees won't and can't matter. I agree with you there. And you said ETH is money implies a market cap far higher than revenue could support. That's what plenty was saying. I also agree with you there.

>> And then you say but the bootstrapping process is different than the terminal environment for ETH. different than that end state you're saying. And the bootstrapping process requires fees. That line, the bootstrapping process requires fees. >> Okay. I'm not sure that it does anymore. Or I'll I'll throw this out at you. Like the last 10 years have been the bootstrapping process and now ETH no longer requires fees. So >> I'd be more on the side of like >> I question that assumption. I don't think we actually need to care about fees anymore. And certainly we shouldn't be optimizing it. We should be optimizing for scaling Ethereum and scaling ETH as a crops store value

asset. And if Blockspace is super cheap to do that, go do Blockspace. Who cares about fee revenue? Bitcoin doesn't care about fee revenue. Gold doesn't care about fee revenue. A store value asset shouldn't care about fee uh revenue. We're 10 years into the project now. ETH can afford to not care about fee revenue. That would be my case. But I think you still believe that fee revenue is important. And there are others like you. I think Donrad has said this, you know, previously. It's been part of his case. It's like, no, actually fee revenue does matter and you should be prioritizing it. But I just see a >> a $100 asset at the end of that path.

And like I've already seen the bootstrapping being done and I'm like now it's time to be a store of value asset and not worry about fee revenue at all. This week, the ETH BTC ratio, as we said earlier, is edging upwards and it is not because of any of the fees that were collected with Robin Hood chain either on the Robin Hood chain or on the on the layer 1. And so if the reason why ETH is edging this week and it's up 8% nine percent to Bitcoin's two and a half percent I if that is because of Robin Hood chain and the positive sentiment and momentum of Robin Hood chain that that is a huge point for the ETH's money crowd the no fee crowd I don't know I

don't know I think I would ascribe more than 50% probability that that is why ETH moved this week but not 100% because Tom Lee also bought this week this week. Uh, >> and it's also just one week and it's pretty it's kind of noisy. >> So, it could be a rand it could be a random walk course. Um, I take I take the point. Um, if the the destination of like a $100 ETH because you value it on the DC8 doesn't strike true to me because like when when I see like a a dollar of revenue is given some sort of like 2,000 uh like DCF analysis. It's like so like for some reason like an Ethereum dollar of revenue is weighted so much higher

than like Microsoft or Amazon. All when I see that I'm like yeah yeah we should make more dollars then because we get a 2,000x premium on the dollars that we make and so we should optimize for revenue like that. >> But let me let me throw another take that that um you may resonate with and might actually be true. So um it's the idea that the human brain can't like contain and the the the scalability of a a store of value can't contain multiple things at the same time. And if you're saying on the one hand it's a store of value in the other but it's also valued from fee revenue.

>> It's hard to mimemetically treat the thing as a story value asset if you're running it on calculations. So it's better to do the Bitcoin thing which is just like fees don't matter. Yeah, >> tough [ __ ] Fees don't matter. And then you get social in the store value camp. And so >> yeah, >> Ethereum is actually shooting itself in the foot on the social layer by talking about fees at all. >> Fees are not the point of ether. And I think if you if you push that understanding of what ether the asset is, which is it's a store value asset.

it has all of the properties of Bitcoin and it also has DeFi smart contracts and you ignore fee revenue, you'll be doing like a much better service to kind of the the narrative and this is a mimemetic um asset store value assets are that by nature. So don't talk about fee revenue is what I would say. Yeah, I think the Bitcoiner the Bitcoiner archetype would agree with you because there was like a early process of like trying to get utility out of the Bitcoin blockchain by like timestamping startups and all these startups that that that tried to like make the Bitcoin blockchain useful and all the Bitcoiners are like we need to drive that out of

the blockchain because we need to remove any sort of value capture mechanism at all and we need to trim away everything from Bitcoin other than BTC the asset. So I find that I find that argument to be highly congruous. And so yeah, I I do take that point. I do take that point. Jo Joseph Lubin weighed in here. Uh he said Ethereum L1 revenue fees should stay low to foster growth. That's his reason for it. And he basically says ETH will make it up on uh becoming a store of value asset, but want to keep the fees low and supply humming in order to attract more market share. So that's another take. Um, we could get into some more on Ethereum L2 road maps. I don't know if we want to do that or just keep

moving on. >> I want I do want to talk about Stephen Goldfeder. Did you call it Steven Goldfeder radicalism in the notes? [laughter] >> Yeah. This is the arbit founder of arbitum, right, who had proposal to this dilemma. What what was what was his take? Okay, so his proposal, this was on Twitter, is this is downstream of this exact conversation from the ARC analysis. Uh he says Ethereum should adopt its largest roll-ups in the sense that a critical bug in arbitum base or Robin Hood chain should be treated as an Ethereum vulnerability and trigger an L1 fork just like an L1 bug would. And do you remember during the Ian layer days, Ryan, when Vitalic wrote that article,

don't overload Ethereum consists? Yes. Yeah. So, uh Steven Goldfeder is proposing to overload Ethereum consensus. >> No, he's not. He's just saying just arbitum not overloading it just add arbitum >> and and base and Robin Hood chain or I think what he's saying is like any layer 2 ecosystem that is of sufficient critical mass they get to you know do the regulatory capture game or regulatory arbitrage game and like >> well we get the protection of Ethereum the Ethereum layer one because we are big enough. Yeah, I think that is what he's saying. And he's saying in exchange for that, we as L2s would be willing to pay more rent to ETH holders. We'd be

instead of the 0.15% >> that you're getting today, maybe we'll do 10%. Maybe we'll do 20%. Because the the service is worth more to us because we don't no longer need a security council. We accept the sovereignty of Ethereum L1 and that's a fair exchange. big government instead of instead of to state power, >> less federalism and a bigger federal government, let's say, and so we'll give you more taxes because you're giving us a higher level of service, you know, like the analogy that we've often used is right right now it feels like many of the L2s like arbitum are in kind of this um you know, uh like almost like a NATO security alliance, but they have their own sovereignty. It's kind of opt in.

They don't pay that much. This would bring them closer to like a state in the union of chains, right? under the sovereignty of the L1 in exchange they they'd pay higher taxes is closer to the United Chains of Ethereum vision but it does have the trade-off of wow you are really overloading the consensus and being dependent on this third party do you want this chain in the union or do you just add all of that capacity into the into the L1 where you have kind of like full full control and full ability to make it crops the way you want it to.

So something that Lorenzo said, the original tweet that spawned all this conversation, he was he's talking about the dichotomy between ETH is money and ETH is a revenue generating asset. He goes, "This is the uncomfortable truth. Robin Hood was never going to build on Salana, Sooie, or any monolithic layer 1, which what you said is like, well, what if we just put the capacity on the Ethereum layer 1?" Robin Hood chain was never going to build on any other other chain. So, like the $1,538 that Ethereum layer 1 burned in blob space fees from Robin Hood, it was never going to get in any other way be other than the L2 model. So, you do have to take that point that like there was never going to be Robin Hood organic

adoption of like the Ethereum layer one. >> Yeah. >> Uh and so I I do take that point. Um what do you think about Stephen Steven's proposal? I think that um it's interesting. I think it's part of a negotiation of moving into a tighter um more coordinated united format of L2s. I don't know if this is the proposal Ethereum should do. Right. There's lots of alternatives out there. One of which is just native rollups. >> Right. >> Right. Stephen would say native roll-ups you have to start from scratch. Doesn't have any state. There's no Robin Hood chain. There's no distribution. It'll just be a nothing chain. And what's a native rollup? A native rollup is exactly what Stephen said, which is it will fork if Ethereum L1 forks. It's

part it's >> the block space of a native rollup is Ethereum in a way that on an arbitum L2 it's not quite the same. Has different guarantees. >> So that's a competing uh direction. So I guess I'm not opposed to it. I just think that um it'll have to develop. We'll have to it'll take years maybe to develop a a a different sort of contract relationship with L2s. And I'm not sure that with Stephen like what if there was a a fork in like arbitum land? You're telling me you're going to fork like you lose the store of valuess of ETH if >> the L1 is forking a bunch.

>> If the L1 is forking a bunch, like you lose something. uh really important here. >> Oh, I'm not totally sure about that. One of Ethereum's greatest skill sets is decentralized governance and decentralized coordination. And with Steven's proposal, I'm kind of seeing that skill set and product that Ethereum has to offer the world being monetized because no other ecosystem has the level of decentralized coordination that Ethereum has. And like Stephen's like, "Will you guys do this thing that's really valuable for us and would solve our problems and like allow us to remove our security council and we would pay you a bunch of money for it and so you guys can monetize decentralized coordination." But it's also the game

that Ethereum as an ecosystem never wanted to get into. Like do you think Preston Vanlon and like the prismatic team and like all the other client teams of Ethereum are be like, "Yeah, I would like to govern whether we do state changes on the Ethereum layer 1 so that ETH can be monetized more." I don't know. >> I have another point before we move on. Before we move on, I have one more point. >> Can you pull up open the Lorenzo chart that showed the value flows of like Robin Hood getting 90% Robert? Yeah. >> Say Ethereum got a much larger number than the $1,538. So of the total paying users of $816,000.

What if Ethereum got $100,000 of that rather than $1,500 of that? Would that be bullish or bearish for Ether, the asset? bearish as hell. You're talking about a $100 ETH price. Fees don't matter. The This is why I don't really >> I Dude, the market would send ETH up. If Robin Hood was paying Ethereum layer 1 $150,000 in the first week, that would send ETH upwards. >> Yeah, it would send it up on on the week and on the two week, but in the fiveyear and the 10year, it would just cap the top. It would cap the top at, you know, an asset that's worth a few hundred billion dollars max. max rather than multi- trillion dollar store value

assets. >> I don't know if that's true. I don't know if that's true. >> I don't know if that's true. >> I mean, I um I think you do have to choose really and I think that maximizing for fees is like a hu would be a huge mistake for Ethereum is not the way formed, >> but you know, the community is somewhat divided on that and you could tell the narrative somewhat divided on that. >> David, we got more to discuss. Uh we got another spin-off from the Ethereum Foundation. Also, the DTCC is tokenizing things. Are they doing it on our public chains or not? We'll talk about all that and more, but before we do, we want to thank the sponsors that made this possible. Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to

navigate it. The best crypto cycle investor I know, his name is Michael Nato. He runs the DeFi Report. This is the guy that sent me a sell alert before the 1010 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years and this year we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes. They're short. They're punchy. I think this crypto cycle is harder to navigate than most. So, let's do it together. Go subscribe to this podcast. Search the DeFi Report wherever you get your podcast, [music] YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for

you now. >> Hey Banklist Nation, it's David. If you're hearing this, that's because you are listening to the free bank list podcast feed. Did you know that there is a premium bank list RSS feed? The premium feed has extra interviews that I do for my own personal research and just deeper questions that I want answered about the crypto industry, questions that I want to answer so I can be more informed as an investor both at Banks Ventures and also just in my own personal portfolio, too. Also, there are no ads, which means if you listen to the premium feed instead of the free feed, you'll get about 20 hours of your life back every year because you choose to support Bank List directly. So, if you're interested in getting extra content all while skipping the ads or you just appreciate what we do here and

want us to keep doing it, we'd appreciate it if you signed up for Banklist Premium and there is a link in the show notes to get started. Cheers to a good 2026. Another week, another Ethereum Foundation spin-off. This is now ETH Systems. Uh this was the Ethereum Foundation's institutional privacy task force. Uh now is ETH systems. Uh this is a for-profit. So the other two previous ones uh ETH labs and Ethereum institutional were nonprofits. This is a for-profit. This is a in for-profit financed by the same investors. So Bitmine, Sharpink, Joe Luben, these ETH treasury companies that are funding this. And this is trying to provide uh institutional privacy tools to build on Ethereum while giving enterprises the privacy that they need

uh to do so. So former EF talent now in ETH systems. So >> you think we go four for four over the last one? >> I think it's got to be that's got to be it. That's got to be all of them. So we have ETH Labs which is protocol development nonprofit. We have Ethereum institutional which is commercializing ETH for institutions. uh also a nonprofit also we have systems which is institutional confidential private transactions and this is a for-profit company probably more tools and consulting type base there's also this uh David I don't know if you saw this another uh member of the EF is leaving the EF to go join ETH labs so Francesco after 5 years >> yeah Franchesco yeah

>> Francesco okay do you know him >> Yep I'm pretty sure I've met him a handful of times >> he's 5 years of EF research and now he's going to ETH labs. It's just interesting that there is now a repository almost like a refugee camp for like um EF people that that want to leave because they're just kind of like done with it. Um EF no longer fits their mission. There's there's places now that can receive them and it'll be interesting to see whether Ethabs grows in that way or or shrinks over time or or stays even or or what happens there. But it's another outlet for people who are passionate and excited about contributing to the Ethereum ecosystem other than the EF. I think that's healthy.

>> A lot of people are talking a lot of [ __ ] about DATs, Ryan. Like DATs are just terrible. Terrible innovation. Fake innovation. At least for one thing with Ethereum. They financed alt EFS which I think is phenomenal. >> Agree. And by the way, I'm not one of those people. I think that's been fantastic for Ethereum in particular. >> For Ethereum. Yes, for theory. >> Then there then there's a bunch of other dats and you're like, I don't know about you. >> I don't know about you, [laughter] >> David. This is a a take that I know you wanted to get into, but we had been talking earlier in the year about all of these DeFi hacks. It seemed like every week, every month, hacks kept getting bigger and AI was partially to blame. Uh has a counter take on here. It's based

on some some data. So, what's the take? Yeah, the take was the month of terrible hacks, which was April of this year, was the top. And in fact, hacks have gotten fewer and less significant ever since then. Uh, and so he he's calling the DeFi hack apocalypse as a false alarm. He goes, it's more than halfway through the year and annualized dollars of hacks in DeFi in 2026 is lower than in 2025, even though that includes April, which was a gargantuan month and kelp. So the the number of hacks I maybe I misspoke the number of hacks is up but the size of hacks fell even more than the number going up which means hackers are picking off smaller and smaller protocols and

abandon wear as he called it. Actually I like that word. Uh like the the existential threat that AI imposed upon DeFi was kind of like the for me like the last draw that motivated me to sell my ETH because like well dude if AI is just going to hack all these damn protocols and these protocols aren't actually growing in TVL then like that's what am I doing? What am I what's my ETH for? [laughter] Uh and but Hib is saying is like well that the worst is actually behind us. >> Not saying do you think he's right? >> He's pretty smart. Um >> I mean he's just saying like there's you know when you talk about the hacks there's something causal there right and so the attackers get this AI advantage but so do then the defenders

>> so the defenders yeah >> we harden our protocols and then >> you know the thing about this is though this could be somewhat lumpy in that it could happen every time there's a major AI breakthrough >> um that's one possibility or >> he's right I mean this just could have been the top and the the DeFi I hack hack apocalypse was um was overstated. Maybe. >> Yeah, maybe. Hopefully, hopefully. Now it's Now it's about vault permutation risk. Do you listen to the premium feed episode that I did with my friend Andrew who vault risk?

>> Oh, dude, there's just a growing number of spaghetti permutations of vaults depositing into other vaults depositing into other vaults. What you think exactly what you think is like, oh, I'm going to get like a 6% yield on my USCC and I'm only going to deposit into this one vault. Well, that vault deposits into four vaults which deposits into four vaults which deposits into four vaults and one of them is just an EOA and it just gets so messy so quickly and then so that has nothing to do with AI exploits and like security and just everything to do with risk management which as you were saying is just Trafy stuff.

>> Yeah, it very much is. in somewhere where we could um we could level up for sure. Uh David, let's end the episode on a take that you had that I wanted to ask you about. You said the buy and burn token model is undefeated and you point to a few popular tokens that are doing well this cycle. Hyperlid VVV and LIT. Uh all talk big games about burning their token. The point of a token is to be burnt. Maker had it right from the beginning. All along Maker had it right. Who who knew? Make make ord what about this model works for you and is working right now. Do you think buy and burn?

>> Uh well it's more about the fact that in 2026 are leading projects with the most energy and attention and growth are doing the buy and burn model. And so like hype is unequivocally very successful at it. VV still still new like there's still a lot of VB to be burned. But Venice, the project, Venice, the company, is like, "Yeah, we want to," they said it on my podcast, "We want to burn every last VVV token." Uh, Lit, the Ethereum layer 2, uh, Perpex, wants to burn all of its tokens. Uh, if you scroll down, you'll see I add JTO from Jetto. JTO, they just launched a JTX this week. It's a proumer trading interface that basically wraps up Salana liquidity and assets and gives you a trading experience, and they burn 80% of

the fees uh, that they receive with JTO. So, it's just like, dude, like we we've been debating the buy and burn model in crypto for forever, but just we keep doing it. All the hot new projects that are on the frontier are like, yeah, and we're going to burn our token. And so, I'm just like, dude, this seems like two things to me. This seems like number one, all of these tokens are generating revenue. It's fee revenue. So, in order to burn things, you actually have to generate fee revenues. That's number one. That's kind of the entry criteria. And then number two, what they're doing with the fee revenue is they're actually prioritizing token holder interest and fiduciary responsibilities to return the proceeds of that capital back to token holders and they're taking that job

seriously. >> Yeah, it's it's something that um previous teams have not um Anom actually had a take on this. I will say on all of those tokens, JTO, VVV, Hype, Lit, >> all of those have equity structures. >> Yeah. And that's not preventing them from doing this. >> Nope. Nope. And they just like the way that we're aligned is we're going to burn the token. >> This was a tweet that's it's somewhat of an iteration on your take, but I think it's worth talking about. This is from Anom. He he says, "I have a thesis that buybacks don't actually work. Hyperlid makes 800 million in annualized revenue.

Pump Fund makes 440 annualized revenue, but Hype trades at 65 billion, whereas Pump trades at 1.4 billion. Why the discrepancy? They're both buy and burn, you know, like pump is just half hyperlquid. Shouldn't it be half the valuation? And he goes on, he has some more detail, but uh what he's saying is the difference is not in actual revenue generation by the business, but instead of the tr the trust premium ascribed to the team. So what he he's making the point that a pump makes tons of revenue, but they've done other things. They raised a billion dollars in the ICO.

They promised an airdrop to users that were never delivered. Even though they have a consistent business model, they haven't shown social alignment with their holders. Whereas Hyperliquid is like no VCs from the beginning, you know, reward in >> didn't promise anything. >> Yeah. And so what he's saying is in addition to just a buy and burn mechanic and cash flows going back to token holders, there's something to do with like there's some kind of a trust premium that's happening with some of these assets. Like are they going to in the future um care about and prioritize token holder interests above all of their other competing interests? He's making the case that Hype has that and Pump right now does not and that's why it has such a premium.

>> Mhm. I'm reminded of Vitalik's legitimacy article that we talked about like hyperlquid just feels very legitimate and they've won hearts and minds about legitimacy and so that's kind of like the squishy squishy social thing but like one part of Anom's article is just like yeah you're talking about revenue quality revenue durability. I think people are not say they're saying that pump's revenue is just not as durable as hyperlquid's revenue because memecoin trading is just not as durable as the perpetual. Yeah. And so one of one of one a little bit of this is like the squishy squizzy social thing and then a little bit of just like okay what's the quality of the actual dollar being produced because did the market will ascribe a premium for dollars based on

the nature of the business. >> Yeah. A lot of token holders are voting with their feet, though. That's going to lead lead to better outcomes [clears throat] and higher quality uh tokens, I think. So, it's all a good thing. >> Bankless Nation, we'll be back in a week. But until then, crypto is risky. You can lose what you put in, but nonetheless, this frontier, it's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.