Ethereum’s Staking Yield Could Go to Zero

Transcript

Bankless Nation, it's the first week of August and it's time for the Bankless Weekly roll up. We got some topics of the week coming your way. The ETH issuance war. We got another debate about an EIP in Ethereum lands. This one's this one's [music] different in the sense that it talks about Ether as money. So, everyone has an opinion on it, including me and Ryan. Maybe Ryan on Yeah, I want to find out your opinion because we haven't discussed this yet, but uh I know I think it was like 3 weeks ago when we heard rumor that this was on the horizon. You said to me you were excited for the drama. So, my friend, >> did you got some drama? [laughter] All right.

You got some uh some discussion about this uh and I want to get your take. Yeah, it's basically the ETH researchers versus the app layer, which usually you don't get such a clean line dividing this drama, but that's what we got. Uh, so we're going to talk about that. We're also going to talk about the cold card exploit. So over a hundred million dollars of Bitcoin drained from what was thought to be very safe and secure Bitcoin cold storage. Everyone the the common line was that everyone did everything right and yet the Bitcoin got yanked. We're going to talk about how that happened and what is happening as a result of that over in Bitcoin land. Uh talking about the stock market, S&P and Dow Jones and uh the indices hitting all-time highs when there was blood on

the streets last week, dude. Wild. >> Yeah, [laughter] wild. >> What? >> I like apparently you can have an alltime high in the stock market at any time, no matter what happened the day or week prior. >> Real buy the dip week. Also, we got to talk about sailor. He sold some Bitcoin again. And he explained himself this time. He said, "I speak as one saver to another." What was he talking about? We'll discuss that as well. Let's start actually, David, with the stock market all-time high. This is the S&P. So, it's not the NASDAQ. S&P what had been off in uh July like 5 6%. I know NASDAQ was down about 10% something like this. And we got what looks to be in the the first

week of August a V-shaped recovery out of that hole. And now S&P's all-time high. Not NASDAQ has not quite hit it. But like, can you explain that? What happened? I don't know, man. Like, look, I'm sharing my screen. You can see the candle. The candle's big. Like we had that gargantuan rise out of the bottom of the Iran war with three massive candles that brought up the S&P up 11% across uh like 20 days. The candle looks like that. It is a the weekly candle in the S&P is a 3% candle that brought it from 7,500 all the way up to the tippy top almost 7,800. were down a little bit at the time of recording, but just like a gargantuan like recovery out from like

where the S&P was down 3.5% off of its off of its highs and then it rocketed up six or 7% in a very short amount of time. And this was all on the backs of uh Liupold from uh situational awareness getting liquidated right at the bottom. So he must have been the absolute pico bottom because he had a pretty decent fund that had a lot of the uh assets that had just made incredible gains and forced seller at the bottom. And then and then I think I think maybe that gave the conf the market the confidence it needed to just hit the hit the buy button because the game's not over and Citadel was stepping in. Like I I that's my read. It does seem like confirmation

that at least the market thinks the game is not over for AI and the AI trade continues. I mean, this is even more stark if you look at NASDAQ, right? Kind of that V-shaped recovery. It almost looks like um Ashen Brener got margin called, he got carried out, he got liquidated here, and then once his positions were liquidated, uh the market recovered. And so it's like it it almost looked like it was targeted to take him out. And then you like the market uh spins back on the other side of things. Now last week we weren't sure if he was like out out you know the capital style hedge fund is kind of like deleted. They are underwater. Uh apparently this was still a flesh wound. It took a a pretty large chunk out of his fund. So he is

down 67% in July. But David still up big on the year. Okay. This fund was outperforming, doing incredible work earlier this year. It's been a abs absolute superstar fund. It had a rough month, but did not completely collapse under the weight of this liquidation. The the fund went from 20 to$30 billion peak to about 8 to 10 billion remaining. Most of that in privates. A lot of the public uh positions were sold off and liquidated as a result of this. So, he's still around. He's still fighting. And it looks like the market has just recovered from this large liquidation.

>> Uh he was reportedly on 400% leverage. Uh which >> um yeah like you get liquidated you get liquidated at that number. >> Didn't you tell me he was at his wedding when this happened >> when he that so [laughter] that he was I think I think it was the day. So there was a Vanity Fair article. Oh, there's a bunch of articles titled, "How to lose billions and gain a wife in two [laughter] days." Whether or not he was like in his tuxedo, like you know, like ready to walk up to the altar, I don't know the timing of that, but like >> it was inside of that window of opportunity where he was getting liquidated and had to get on the phone

with Citadel's Ken Griffin to bail him out. not bail him out, but just like buy his bags. Uh, but yes, um, story for the grand. >> Sorry, not not the best codedness of that memory, I think, for for his future, but like whatever. Ultimately, his his fund is still up 80% on the year. So, it's still one of the best performing funds in a while. But >> assets, better than crypto assets. as an LP, you would have to at least be like at best mixed feelings because you were previously up like 5x 6x on your money and now you're up 80% and so you're still doing very well, but you were doing really well a second ago.

>> Yeah, but it's it's also just sort of the risk management wasn't there, right? I mean, this was quite a cascading collapse. So, I mean, LP's got to be a little shaken, little rattled, but the FOMO is back in. The AI trade continues. How about our friend Michael Sailor over at Strategy? He sold some Bitcoin on the week. What was that about? >> Yeah, so we have like I think three main instances of Sailor selling Bitcoin. The first one where he sold 32 Bitcoin collapsed for the Bitcoin price by like $18,000.

The next sale of Bitcoin, I I can't remember the numbers, but it was much more than 32. It was like in the hundreds, maybe a couple hundred uh Bitcoin. Yeah, that's right. >> And Bitcoin was like flat or like even marginally up on the week. >> Uh this week, Micro Micro Strategy Strategy announced that it sold 1,638 Bitcoin worth 105 million and Bitcoin jumps from 62,000 to 635,000. So, Bitcoin up on the week. Uh Ryan, I'm bullish about this news. I'm bullish about this news. Wait, why? Uh m Michael Michael Sailor the number one holder of Bitcoin selling over a thou a thousand

and a half Bitcoin and Bitcoin goes up. This the the bullc case for me is that Michael Sailor needs to be removed from the market as a key man risk to Bitcoin price. And when he is selling $105 million of Bitcoin and the Bitcoin market doesn't care and actually goes up, >> it's like, oh, you like the market no longer cares about you. You're free to like move to the background as like the main uh marginal pricer of Bitcoin. >> Yeah, I think that's true. He's he's no longer the main character of Bitcoin price action which is probably healthy because the market I think when he sold the 32 Bitcoin priced all of these future sales in basically totally and now right now the market outlook on what

strategy is going to do is it's going to be a graceful unwind process of some of this leverage it's not going to be chaos it's not going to be cascades we know what Sailor's going to do if there's an MNAV premium he'll mint some more MSTR shares MSTR holders might feel differently about this. They might not feel great about what's happening, but um you know, he's going to sell Bitcoin in order to pay preferred share owners. I noticed STRC is back up above 90 was like 9293. >> STRC looks good.

>> So much much healthier. It's up 30% from the June lows, which uh at $71 that was like a a good buy back then. Um right now >> Yeah. Um STRC uh right now. Oh yes, >> Bitcoin is kind of in an interesting place. Like what are we at the time of recording? 60 64K something like that. >> $645,000. We are we have been riding the 200 week moving average since uh the middle of June basically. So like 6 weeks. We have been riding >> the 200we moving average from $62,000 to where it is right now at like $64,000.

>> So the 200 week is about $64,000. Uh and we're just riding that and we have been under that what like 40 days like a few times briefly during this bare market haven't we but like not a long time. uh 40 days. No, I would say under a week we have been under the 200 week average lately I guess lately in the historically like we were under the 200E moving average for like yeah I think 40 to maybe a little bit longer but that was again post 30 Capital Luna FTX contagion which come on you don't see any blood in the streets like that.

Oh it's interesting so uh Bitcoin has been highly correlated to NASDAQ. So part of the reason Bitcoin is up on the week is because NASDAQ is also up and the correlation has >> I don't know if that's true. I don't know if that's true. >> It's the correlation has like not been higher in recent like um recent terms. But the question the question >> the if you look at the NASDAQ chart and the Bitcoin chart, those are just different looking charts. I mean they yeah I I guess like um in in recent times over the last 30 days but um I I guess I think the question is has Bitcoin bottomed relative >> it's always the question it's always the question >> so like are like how are you feeling about it personally are you prepared to sell your AI stocks are you like fading

this uh recovery market recovery um and like buying crypto assets or are you still like okay AI trade back on I guess We're in for like I don't know round three, round four, whatever round this is in terms of AI trade recovery here. What what's your what's your outlook right now? >> Yeah. Yeah. I I've been asking and talking about this question a lot in the last week or so and I think we've been talking and asking about this question a lot on the weekly rollup. As a vibe, the most non-technical like pseudo answer possible. If you just look at this chart, which is the Bitcoin chart with weekly candles that goes all the way back to 2020, you see the cycles, right?

You see the 2020 cycle, you see the 2022 to 2023 and a half bare market, and then you see the the current cycle where Bitcoin went up to 130. Uh this the tail end of the current cycle coming down from 130,000. It just doesn't look done yet. The chart doesn't look like it's done completing its cycle. So as a vibe like you can see it going down a little bit more. Yeah. >> And then and then having a big U-shaped bare market for like a year and a half. >> Sure.

>> So as as just speaking as to the visual aesthetics of the chart, it doesn't look done yet, which is not a good answer, but it kind of correlates with like the whole the cycles are intact. And if we leave the cycles intact, the the visual shape of the chart looks 85% complete but not 100%. I'll give you another vibe that I feel which is kind of sort of similar to this which is we don't fully bottom until the AI trade is over and the market acknowledges that because I think what's happening even as I'm looking at you you're not prepared to sell your AI tech stocks and your QQQ and whatever else you have in your trad

portfolio and buy crypto right now cuz you don't quite think it's over yet and that's what I think the rest of the market als also sees they're still disproportionately in AI. They're still in NASDAQ. >> They haven't yet come back to crypto. And I don't think we get that full recovery until that happens. Until the AI like the AI trade might have to die in order for crypto to live. I think that's from a vibe perspective how this could all play out. [laughter] >> I I'm I've been thinking about that more and more. you I was listening to your episode with Michael Nado this last week and the word timebased capitulation >> came up a bunch.

>> Yeah. >> Where like I don't have I don't have any reasons for why there's any more forced sellers or sellers at all in Bitcoin. Like who like Sailor is selling uh a thousand and a half Bitcoin and the price is going up. Like no one is a forc seller. There's not that that much leverage in the system. Plenty of leverage in per in the down market coins but whatever. Uh so like who's going to be the for seller? The answer is like no one. But there could be opportunity cost sellers where the QQQ and like a micron and like SKHEX is just doubles in price and you're like what am I doing with this stupid [ __ ] Bitcoin that's still at $64,000?

I'm and I want to get into the AI trade so I'm selling so I can buy the top of the AI trade. And like you can kind of see you can kind of see that and that that could take the rest of when I when I just said the aesthetic completion of the AI of the of the Bitcoin cycle could needs [clears throat] six more months and you could see the AI trade running for six more months, nine more months and then the timebased capitulation of Bitcoin holders being like, "Fuck these stupid bitcoins. Let [laughter] me buy let me buy some more memory stocks."

Even though memory stocks have gone up 5,000%. I kind of think you can see that happening. >> I can see it, too. I can see it, too. That that might be what is playing out right now and what has to play out before we see the bottom and before we see the uh bare market conclude. David, we got more to discuss. I want to talk to you about the ETH issuance war. What is going on? What is the proposal that rocked the Ethereum world this week? Also, the cold card exploit. uh victims did everything right. What happened?

Could this happen to other self-custodial holders? You said it seemed like no one did anything wrong, but somebody did. Okay. There was there was [laughter] a problem in this. We'll unpack what that is. All this and more. But before we do, we want to thank the sponsors that made this possible. >> I've been trading crypto assets for almost a decade and I've used so many wallets, exchanges, [music] aggregators, frontends, and I'm kind of always looking for the same thing. one interface with deep liquidity across a bunch of chains and assets [music] and the ability to act in private and I still control my own funds and I've never really found it and I'm always switching wallets, juggling gas fees or getting eaten by [music] slippage.

Near.com feels fundamentally different to me. My account is easy to use and I can take all the actions I want from any chain while my activity remains confidential. It runs on Near which has moved over $23 billion crosschain using postquantum signing and has over 5 years of uptime. Near.com is the best way to be on chain and be in control. [music] Get 20% of your trading fees back through the bank list link. It's in the show notes. Not investment advice. Self-custody one, but it still has a usability problem. A seed phrase on paper is still a single point of failure. Phones get lost, devices break, backups disappear. Bit key is a self-custodial hardware wallet built for that reality. It uses a two of three multi-IG with keys split across your phone, the Bit Key hardware device, and

Block. No single key can move your Bitcoin and block can never move it alone. There's no seed phrase to lose or expose. And if you lose your phone, your Bit key, or both, built-in recovery gives you a path back. [music] The hardware screen also lets you verify the destination before approving a transaction. And that's the point. More control without one mistake putting everything at risk. So download BitKey today and use promo code bankless to get 10% off of your Bit Key. This episode has been sponsored by BitKey. Travel rewards have gotten way more complicated than they need to be. You've got points that expire, transfer partners, blackout dates, and somehow you still end up wondering if you actually got a good deal. Coinbase is taking a much simpler approach. When you book flights, hotels, rental cars, or vacation rentals through the Coinbase 1

travel portal using your Coinbase 1 card, you'll earn 5% in Bitcoin on eligible travel bookings. Book a $400 flight and you'll earn about $20 back in Bitcoin. No reward charts, no transfer partners, no redemption games, just Bitcoin that you can hold or trade. And every other purchase on your Coinbase 1 card can earn up to 4% back in Bitcoin. [music] Plus, new card holders earn a $50 Bitcoin bonus after spending $100 in their first 30 [music] days. So, if you've got travel coming up, check out the link in the show notes and see if you're approved today with no impact on your credit score. Or just visit coinbase.com/banklist.

Terms apply. That's coinbase.com/banklist for more information. On August 4th, six Ethereum researchers Jerome Deashay, Justin Drake, Dap Lion, Pintail, and a few others proposed a change to ETH's monetary policy, mainly how ETH staking rewards work. This has been called the tapered issuance burn. The idea is that Ethereum pays people pays stakers for staking their ETH, but there's no cap on how much Ethereum pays for ETH stakers. No matter how much of the total ETH supply gets staked, even if all of the total ETH supply gets staked, stakers will still earn a positive yield, which means that there is always an incentive to stake more ETH forever. And so people

are worried that Y >> can I stop you? So there's no cap, but there is a curve to issuance, right? Issuance does go down the more stakers that that come into the into >> That's not true. issu always issuance always goes up the more ETH gets staked. The rate of new issuance goes down as >> a proportionate like a a a smaller proportionate amount the rate of new issuance right that's the way to say it. >> Yes. Yes. Yes. Uh so right now we have a third of all ETH staked but it there's been a perpetual march upwards and this proposal like proposes the idea that we don't want that number to you know approach 100%. We don't want 100% of ETH staked,

>> but there's nothing to stop that from happening because there's always an incentive to stake more because more ETH will be minted uh to pay for the security of the ETH being staked. Uh and so what this proposal does is that Ethereum starts destroying burning a slice of the rewards before stakers receive them. The more of the supply the stake that staked, the bigger the slice that is burnt. So this is called ETH targeting. This previously was called ETH targeting uh or excuse me stake targeting. So once staking, ETH staking hits about half 50% of all ETH and we're about 33% of all ETH right now, the entire reward gets burned, meaning

staking pays essentially nothing beyond 50% stake and the incentive to stake more ETH basically shuts off. And so this caps the incentive for staking ETH beyond 50%. So at like 45% the staking rewards is almost nothing. You only have like 5% of these otherwise uh issued staking rewards being paid to stakers. And then at 50% is zero. Uh so for people staking today if this proposal were to go through the practical effect would be that their base staking yield drops roughly in half from about 2.6% yield to 1.2% 2% yield if this change were to go in uh right now. Uh who is pushing this and who is against this? Uh

the EF and EF researchers like this proposal. Uh one of the is that generally true or is it just the the subset of EF and research types who have their names on this proposal. By the way, Justin Drake is one of them. So I don't think he said anything public in support about this, but he is named on the proposal. He's on the authoring the proposal. Yeah, >> but you're not saying it's like all of the ETH researchers and all of the ETH. >> Yeah, definitely. I mean, there's no consensus inside of the EF. Yes, you're right. So, the people who are who have proposed this are all EF researchers and like the researcher type. Uh the people who are against this are interestingly all the DAP layer people. So DeFi

founders like Stonnie from A, Mike Silagazi from Etherfi, uh, Lido is against this. Uh, DC investor as a community member, he he is very anti- this. Uh, and so it's basically EF a handful of EF researchers and then basically [laughter] everybody else. >> Sounds like a great proposal. [laughter] Let let me try and just like run through the arguments for for both sides >> because here's the thing. Here's the thing as you're running through that I I think I really want to understand right because the proposal takes as a given that there is some problem right now and some problem with this and it takes a

given that we were on this march towards 100%. And the the closer we get to 100% the more problems that we'll see. I think that assumption >> really needs to be reinforced. >> Yeah. So, what do the authors say about the problem here? >> Yeah. So, so the the the procase, the proargument for tapering/targeting is that Ethereum is overpaying for security. And as a broad strokes, Ethereum, it's been discussed that Ethereum is overpaying for security, so therefore we should reduce issuance.

That has happened many times. uh when we were in the proofof work phase, ETH issuance went from five ether a block down to three ether block down to two ether block before we had the merge. And so there's a little bit of precedent of hey, we're overpaying for security. Let's pay less for security. Uh and that's just a matter of like economic efficiency and making ether uh it goes along the social contract of minimum viable issuance. Like if we like minimum viable issuance, this is that. Uh so that's one proargument. Um, the next pro argument is that unbounded staking, so a a capless a constraintless amount of incentive to stake ETH erodess vanilla ETH's moneyiness and centralizes the

network on LSTs. And so with 100% ETH staked, you're going to see like Lidos's uh stake to ETH or uh like RocketPool R ETH, those will be Ether in the Ethereum economy because vanilla ETH will all be staked. So you'll actually see a disappearance of vanilla ETH and it will be replaced by liquid staking uh derivative tokens. And so as far as the Ethereum economy is concerned, basically it's going to be Lidos's staked ETH or Rocketpool's R E some sort of LST rather than vanilla ETH. And so that in essentially that captures the network by these liquid staking tokens and vanilla

ETH kind of disappears. >> So there's no argument there under that that ETH would ETH vanilla ETH would lose its moneyiness relative to those other units, right? It it'd be almost like rather than in the US economy, rather than us using the dollar, >> we're using like um treasuries or something like that or not even treasuries, we're using like Bank of America money markets in order to private money tokens, right? >> Yeah. Exactly. Yeah. Uhhuh. >> And Yeah. And so like this also just kind of uh if you are just trying to hold vanilla ether it this allows if this proposal goes through holding vanilla ether will just be much more palatable and you won't get diluted nearly as much by holding vanilla ether.

And so it's a it's a pro eth is money uh change is is an argument is and then like >> is an argument. Yeah. And then lastly it's like it's like a a minimal change. It's really not that complicated. They call it credible. is just a permanent single constant that leaves most things intact like me is not being changed. EIP1559 is not being changed and it's kind of being framed as like just completing the postmerge monetary architecture. >> It's a minimal like technical change. This is like a few variables in the code we have to change to make this happen. Like saying it's a minimal change from a like anytime you do anything to monetary like policy and issuance. This is it ain't a minimal change. This is a pretty big social change, but they're saying it's minimal from a tech perspective.

It's not complicated. There's not going to be a bug in the system. It's pretty easy to implement. >> Yep. Okay. The opposition argues that this actually just accelerates the centralization that it claims to fix. >> So compressing yield, reducing the amount of issuance for ETH stakers makes it more difficult for the marginal ETH stakers. So solo stakers and home stakers are going to have a harder time because they are less efficient than the industrial commercial stakers like Lido or Figments. So >> Well, you just cut their revenue in half, but they have the same fixed costs.

>> Exactly. And so people who really like operationalize and minimize their fixed cost do better here. But you know, the hobbyist staker, the people that carry their own hardware, uh, you know, pay for pay for all the costs, those people are getting pushed out. Uh and that's going to be the home staker, the the solo validator, which as a social contract and as like a system, you know, Ethereum has always preserved the sovereignty and power of the individual solo staker. That's like that's who runs Ethereum. You know, Ethereum is not a product by corporations and institutions. It's a product by the user for the user. And this makes that harder. Uh the next argument is that

staking yield is DeFi's base rate. So leveraged staking loops, LST collateral on a you know structured product, institutional and tre treasury allocations, all of that, all the fact that uh staking yield is a thing is a pretty core primitive that holds up a lot of DeFi. tapering it towards zero collapses so much of what DeFi is built on and just reduces a lot of the ether in DeFi. So, if your vanilla ether isn't getting yield, well, you can get it in DeFi. Uh, and taking the yield away from Ether, I think the argument is that a lot of Ether would not have a reason to be in DeFi and DeFi would just be have

less TVL and be overall less rich as like a a sector. And then lastly, uh, credibility and process. This is just like the issuance debate. Um, there's like a 48 hour comment period and aggressive timeline uh from the the researchers uh who are saying like, yo, let's let's push this through. And then the community is like, you know, it's too too fast. Uh, and then also just like issuance in Ethereum is already extremely low. It's one of the lowest, if not the lowest chain with the lowest issuance. Why aren't we trying to lower it anymore? This is >> low Bitcoin. It's It's as low as Bitcoin after like 12 years, you know, of Bitcoin doing this.

>> So, it's it's just why are we trying to fix a problem that's not actually a problem? Why like per like perfect is the enemy of good. We're pretty good here. Why are we trying to be perfect? Um and then also modelers of uh saying that this is just like we under underestimate second order effects if this changes go through. We don't really know the second order effects and that is dangerous uh and so let's just not touch it. So I feel like those are the two sides. There's another uh subargument here that I've seen which I think is also good which is like hey anytime you open the window to changing the dials on monetary and issuance you kind of reset the clock and now everyone

knows your store of value asset can actually be tweaked and changed. This is the ancient um Bitcoin 21 million argument and their core criticism of Ethereum is like you guys move the dials and so like anytime you move the dials you prove that dials can be moved and you prove that there's some sort of centralized cabal uh you know like doing this and so like if you move the dial you sully the experiment at all right and the Ethereum position is no we'll move it a few times >> and I think we'll move it to being more restrictive and beneficial to ETH holders That's right. That's right.

That's always in that direction. Not like always in favor of less issuance, not more issuance. I'm not I'm not into that argument. I think the version of that argument that I do agree with is yo, Tom Lee just bought 5% of ETH and his whole entire idea is that he gets to stake it and get the yield and we're just rugging that from him. [laughter] What the [ __ ] And so that as a uh adulteration of the social contract I think is very valid. And Tom Lee is going to be like, "What the [ __ ] are you guys doing? What if what if this pisses off Tom Lee and he sells the ether?" Not inherently because Tom Lee is like, "I'm worried about you guys like tinkering with the monetary policy, but because I'm worried about you guys destroying

the value of my investment." >> I actually think that you might be underrating that. Or at least I rate that so like much higher. I think that >> the tinkering of the dials of monetary policy. >> Oh yeah. I think there has to be absolute overwhelming consensus. Like it has to be like a a bill going through Congress with 99 senators voting yes for any issuance change to happen. [clears throat] >> And especially when we're at this point of like >> I agree with that. I agree with that. >> We already have like really good issuance. It's already fine. What problems are you sol? I guess I'm sort of revealing my hand of like where I sit on this debate a little too much, but I guess I uh I really do believe the

Bitcoin argument of like >> you got to oify that monetary policy and that the faster that Ethereum gets to complete oification of it and that no one touches it because it's like good enough um the better for the moneyiness use case and the story value use case. What I think is interesting about both sides and we could talk like about some of the takes that we've seen and what what you think and and maybe what I think is both sides are speaking on behalf of the solo stakers, you know, of decentralization. This is about the solo stakers. Both sides are saying, "Hey, this is good for the moneyiness of ETH, right? So the side that's saying, hey, we got to push this forward is saying, yeah, we're doing

this because ETH is money." And the side that says, "No, no, no, no, no. Don't do this because you'll you'll kill ETH's ability to be money cuz you're you're dialing with a monetary uh policy and you lose credibility that way and also ETH is money in the DeFi economy. You nuke the DeFi economy somehow because of staking yields um going down then you also lose moneyiness there, right? So it is I guess if you zoom out refreshing that both sides really care about ETH as a monetary asset. So maybe that's a that's a win I take from this episode.

They're just divided in terms of how to actually do this. So what are some takes that you've seen that uh from around the community that that you've enjoyed or some points that we really didn't highlight yet? >> Most of the takes on crypto Twitter, Ethereum Twitter have really just been from the ante camp because it's it's their position to react to this proposal. So Stonnie says, "Ethereum should not focus on gaming staking issuance and cutting staking rewards. That is not the problem Ethereum needs to solve. Priorities are privacy, scalability, and security. Uh yield becomes unpredictable, a negative factor for any institutional buyer, making ETH borrowing strategies mostly unviable.

Ethereum should not be punished for its growth." Uh DC investor says issuance is already very low. Staking yield is now a key driver. Predictability matters. Solo stakers should not be priced out. focus on scaling. Uh Mike from Ether says, "Disappointing on every level. EIP released with only 48 hours notice. Every builder on Ethereum opposes this. This reinforces the Ethereum critics position that the network is run by a small group of insiders." I think that has been interesting to me is like if you build uh a ETH product, an ETH deposit product like a or Etherfi, >> you don't like this. No one no one who's building an ETH DeFi product likes this.

And I think that is very important signal. And I think this is something that like the Ethereum community has been like trying to elevate in the 2024 like EF crisis of like please listen to the builders building on Ethereum and making Ethereum valuable and Ether valuable. And that is Mike and Stani uh and Lido. And so like those people have these people have skin in the game and the people with skin in the game are saying no. And the ETH researchers, you can argue maybe they they love the ivory tower like technical perfection, but they have less skin in the game than Donnie from A or Mike from Ether because they're researchers. They don't have businesses built on this ecosystem on

top of this foundation. >> So, what's your take on this? You think it's a good idea? You think it's a bad idea? If it was up to David, would you vote yay or nay? >> Uh, I mean, like you just exactly what I just said. Like I can't I I can't in good faith vote yay for this proposal when every single DeFi builder is saying no. Like it's DeFi is how ETH became monetized as a monetary asset. And if they're not happy then like it's it's hard to in good conscience vote yes for this. I like this proposal from a technical purity standpoint. Like >> in a in a vacuum.

>> Sure. I think this is a good proposal if we didn't have DeFi and Tom Lee and all of the path dependency that we have. But we do have that. >> So this would have been a great proposal to have introduced like years ago, 6 years ago, seven years ago, eight years ago when like as soon as possible basically. Maybe maybe one improvement to the proposal is that let's not have this jump from 100% ETH targeting to 50% ETH targeting. Maybe we can implement it over a very long time like a decade. So like it first it targets 100% then it targets 99% then it targets 98%. And that takes 10 years to approach 50%. So

it smooths it out. Um but I don't think even DeFi would really like that at all. And so I also agree with your point is like it's it's ETH the monetary asset. We need overwhelming consensus in order to change this. >> All right. >> I like the proposal. I like the proposal in a vacuum, but there's too much baggage to say yes. >> Yeah. >> I um I think that my position is I don't even like the proposal in a vacuum. Probably interesting. Like it's interesting as like a a hypothetical in a white paper like what if we did this >> but I think you need overwhelmingly good reasons in order to actually change issuance and I don't I don't see those

reasons like the benefit does not seem worth the cost as opposed to the merch. Okay, incredibly obvious, full community buyin that we were going to take proof of work issuance to proof ofstake issuance and change issuance policy accordingly. There was a technical reason for that. There was massive benefit. There was overwhelming consensus. This doesn't even have anywhere near the mark. Like the the benefits are sort of ethereal and vague and second order and we don't like know.

But the other thing I I go to is like just kind of an aam test of just would this if this got implemented would this make me more bullish or more bearish on ETH and the conclusion there is more bearish like I would not be more bullish if this proposal was actually pushed out and implemented and on that basis alone it's it's kind of >> it's not a good idea from my perspective now >> there's another question which is what's the probability that this goes forward and actually gets pushed you gets moved through and I think that probability is like quickly approaching 0%.

So I think we're like under five like we're just I don't think this is going anywhere. >> I don't think this is going anywhere >> particularly given the reception that it received. If it had a completely different reception, if there was overwhelming positive sentiment, then maybe it would have a shot. But it is dead in the water at this point and I I predict there will be no issuance changes. So at some level some of the people saying aha look over Ethereum it's just like it's changing issuance policy again see it's not decentralized it's captured all these things no this is what decentralization actually looks like this is the messy process of decentralization taking place there's a proposal it's pushed out there the rough consensus of all of the stakeholders and

participants and investors and researchers and app builders weigh in on it and it hasn't reached the threshold and so it doesn't happen. and it gets shot down and that's all healthy. So, >> we just had a long conversation about it, but like I don't think it's going anywhere and you know if if this would make you bearish, you don't have to worry about that because I don't it's just not going to happen. >> I would agree. Yeah, like I said, it's one thing to be frustrated about the EF for not being communicative to its app builders and it DeFi ecosystem. It's another thing to push a proposal where the DeFi builders are all saying this harms my business. Yeah.

>> And also my business is in the business of monetizing ETH and making making it more valuable. So WTF >> um Yeah. >> Are you going to host some debates on this though? >> Um I was thinking about hosting a debate. Um, but instead I think I'm just going to talk to uh some of the DeFi app builders uh about their their opinions cuz like we I did I did this episode actually with Casper and Onsgar forever ago. Like this isn't a new proposal. This is this proposal is like two years old now for some reason back >> targeting proposal and particularly at a time where some assumptions didn't play out. remember like people were thinking that Lido would sort of dominate everything and just like get all of the

stake and like I I think some of the things that people assume just like haven't played out fully. But yeah, we we have covered this train before, haven't we? >> Yeah. Yeah. And so, um, so I've already technically done the the pro side of it. And so now I'm going to do the ante side of it. And like I can embody the proar argument well enough where like I can throw my interesting like angles at them and they can see what I can see what they do with it. Uh, all right, let's move on uh to the cold card exploit. So this is an individual named Jonathan Goodman who tweeted out, "$1.6 $6 million in Bitcoin was drained from my account on July 29th in the cold card wallet hack. My Bitcoin was in cold storage. My keys were on a cold card

device kept in a safety deposit box that had never been connected to the internet. This part's nerdy, but here's what happened. Hackers discovered a vulnerability in the part of the hardware wallet code used to create seed phrases. This allowed them to use AI to brute force guessing seed phrases. I I was at our cottage and heard about the hack today. No way. this affects me, I thought. I logged on to Wasabi, the software that lets me view my Bitcoin wallets online. Right away, I saw lines of red transactions, withdrawals, and I knew uh from 9:36 to 9:43 p.m. on July 9th, every wallet I had ever had had been emptied. 18.2 Bitcoin gone, over $1.6 million Canadian. Perhaps the

hardest part about this is that I did everything right. I never shared my seed phrase with anyone. My devices never touched the internet. Everything was kept in multiple safe and safety deposit boxes. None of it mattered. >> O, >> absolutely brutal. Absolutely brutal. So, the cold card for those not familiar with it is sort of like a ledger wallet or a treasure, some more popular devices. I think optimized really for the Bitcoin community. So, it's a smaller wallet in terms of footprint, but didn't support other coins. It was more the Bitcoin purist approach to it.

And of course, >> this same story played out in, I don't know, maybe thousands of other cases. >> $130 million total in Bitcoin being exploited from offline hardware wallets. >> And some of these, you know, are pretty like uh smaller holders. Of course, these are retail investors. And they're doing the thing that Bitcoiners are supposed to do, going bankless can do, which is like not your keys, not your crypto. Okay. Not >> not my keys, not my crypto. I will have custody of some keys. That's what they decide to do. And they use a hardware wallet and still it gets drained. May maybe let's talk about what went wrong

here specifically. So the original poster said something to do with the way randomness that the seed phrase was generated. What went wrong in the cold? Yeah. >> So with a with a with a seed phrase, a seed phrase has theoretical randomness as in like there are so many different possible combinations that even with AI, there's no way to to try all of them because there's more possible ways to create a seed phrase or a private key than there are like atoms in the universe. Like that's a theoretical security of Bitcoin.

>> Apparently the way that cold card was generating seed phrases was imperfect in its randomness as in it had like a kink or a flaw in its randomness generation that allowed for AI to like detect that pattern and reduce the scope of how much randomness it would need to do. Uh and this is actually just like I once upon a time read a book on ciphers. You would actually like it. I should send it to you. And like the number one way to break a cipher is that there is an imperfect imprecise way of generating randomness and there's like a flaw and that gets exploited by some some pattern analysis

>> some kind of weak entropy. So whenever you're generating a private key of some form, you have to have actual true randomness, >> perfect randomness. >> Yeah, there are many ways to do this. It's not like an unknown thing. It was just apparently the cold car wallet. It had a um a random number generator that was like much better, but it was not actually switched on. >> So, it was using this much weaker form of randomness instead. >> And they didn't know about >> did they it wasn't in I don't know wasn't switched on. They were using the weaker method rather than the stronger that they actually had. And so that means everyone who used a cold card uh uh cold card wallet

>> from this time period from like you know 200 uh 21 and and beyond actually generated private keys that could be guessed by some attacker some sort of that was not impervious to a brute force attack. And so that's what's happening right now. And there have been waves of these attacks, right, where, you know, hackers are just looking for cold card wallets, finding that profile, and then guessing at the seed phrase, using AI to do that. And then once they do, they drain the wallet.

[sighs] >> Brutal. We don't really know who the hackers are. Like, obviously, I think everyone's first reaction is North Korea. We don't really have any evidence that it's North Korea. Um, >> it could be anyone at this point, especially after this gets publicized, then anyone who wants to go try to do this can like then go do this. I think we should tie this off with a few other things. One is this problem does not exist in the treasure ledger wallet. Some of the more popular wallets, they have since, you know, released and emphasized how their randomness is actually generated. So, it's not a flaw that happens in some of these other hardware wallets. Um, so should be like safe if if you're using one of those. I guess the other thing

though is does this pose an existential question as to like self-staking and self-custody or sorry not self-staking self-custody in general? So if like you're still trusting the hardware wallet manufacturer with this type of thing to like generate private keys correctly and to do things correctly like I guess it's a wakeup call that you can do everything right from a self-custody perspective and still be vulnerable [clears throat] to this.

Some people are saying this will cause everyone to move their Bitcoin to ETFs or to put it on exchanges where these sorts of attacks aren't possible. Do you think this is the end of self-custody, David? Do you think it's just like too hard? There's too many problems with it and people choose not to do this moving forward and it'll all go in custodial uh providers. I was getting lunch with a a friend this week and she told me that um she was working at a company and somebody connected her with a contact that they wanted her to talk to and they took a few meetings and built some trust, got them to download Obsidian, which is a a thing that you use and I use,

>> but it was a it was a borked version of Obsidian. So, after three meetings, she downloaded it and it stole all of her money in her in her browser extension. >> Are you serious? Yeah. And the reason why I bring this up is because they were using AI to fake themselves on the call and and to to run this exploit. And so like the common denominator here is AI. AI has been just like the big and and that wasn't imperfect math. That was social engineering nonetheless AI assisted. And you know AI is the reason why people are scared to have their money in DeFi at the moment. like you AI is shaking the foundations of self-custody.

>> Uh and that that's scary. And like I there's probably the the fewest self-custody and the fewest bankless people since 2021 2022 because of AI. And um it's there's seemingly more holes to find using AI maliciously than it is easier to like patch them using AI uh to to be defensive. And so like yeah, dude, it's like the darkest days for self- custody ever. like no no no no matter how you want to secure yourself like AI can find a way there whether it's like exploiting perfect randomness or your friends accidentally connect you to the

wrong Telegram account cuz like the name looks kind of similar and they were they weren't checking um >> so right now the the the attack abilities are exceeding the defense abilities right now it's just finding vulnerabilities so whether that contin to recover from that because that is that like losing all of your strikes straight into the heart of your emotions. And like once it does that then like no one want no one wants to go doing self custody. Like imag like this guy this guy that lost $1.6 million of his of his after doing everything. Is he ever going to do self custody ever again?

>> Yeah. Right. And like I guess from one perspective this could totally have been avoided if Cold Card did things the right way instead of doing it the wrong way. But at another level, like what is an individual supposed to do? Like am I am I supposed to like >> analyze exactly how the randomness was like, you know, for the hardware wallet that I I purchased, how that was generated in order to feel safe that it's like actually working. Like that's just not feasible for the average person. So yeah, it's a it's definitely a big pothole here and um hopefully hopefully things turn around a little bit, but for now do not if you are using cold card, of course the the message is

get off of that wallet, do something else, >> move your assets, do something else. Uh and we'll we'll hopefully the attacks subside and people are able to migrate. >> All right, let's uh move on. We're going to talk about a few more things. We got to talk about clarity act not looking good on a lifeline uh in the teens probability on poly market. We're going to talk about that. We're going to talk about unis swap uh pools pools.trade is yes pools.trade is their new product or I'm going to tell Ryan exactly what he needs to know about unis swap's new token launchpad. Uh and then also cloudfare make those listeners know this if they listen to our episode with Matthew Prince, but Cloudfare is introducing crypto wallets for anyone who wants it. What are they doing? What

are they doing? We got the answers. We're going to talk about all that and more, but first we're going to talk about some of these fantastic sponsors that make the show possible. Markets don't move one asset at a time. One day it's Bitcoin, the next Nvidia, then gold, and then the S&P. But most traders are still managing their portfolio across different platforms, different accounts, and different pools of capital. Bit just changed that. Their new stocks 2.0 product lets you trade tokenized equities directly with USDT, all inside the same app you already use for crypto. This is not just another tokenized stock product. Stocks 2.0 know is designed around deeper liquidity, faster execution, and the lowest fees on the market at just 0.04% and 1:1 economic exposure to the underlying stock. Dividends, [music] stock splits, and other corporate actions are reflected automatically, helping your position stay aligned with the asset you

actually want exposure to. One platform, one account, multiple markets, crypto, equities, commodities, and more. All accessible with USDT. Bit trade smarter. Start trading today through the link in the show notes. This is not investment advice. 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. YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you now. Uniswap introduced a 24-hour countdown yesterday for pools. It took him like 27 hours. They had a little bit of a a shaky start, but they introduced pools. which is unis swap's own native token launchpad like like pump fun is pump fun for ethereum unis swap is doing pump fund now yeah and like granted there are so many token launchpads on ethereum this is not a new

thing but it is new that unis swap is going verticalizing and going down to the actual token creation mechanism >> and so they have a couple ways to launch a token uh a couple different mechanisms um both end up in a unis swap v4 for a pool with a fixed 1 billion supply of tokens. So there's the crowd launch token. So that's a 4hour T-wap auction to help uh make bund like just bundle resistant cuz like a big problem in the memecoin token launchpad world is that like one person will bundle up a bunch of wallets and own like 30% of the supply then top on your head. So that kind of fixes that. Uh, and then it graduates at a $10,000 fully diluted valuation. Or it refunds everyone if if the $10,000 market cap doesn't get

launched. Or there's instant launch, which is just like no rules, wild west, like buy at your own risk. It's live immediately classic bonding curve style. Uh, and so, uh, yeah, UniS swap has released a token launchpad. Looks pretty similar to all the other kind of like token launchpads out there. Um, but it is kind of exciting that UNIS swap is launching it. Uh and so there is a I think one of the interesting things is that the uh the uh fees collected by this go back into buying the token itself. And so there's there's it's like touted as like more volume. It's even more beneficial for the price of the token as opposed to that coming out of the pool of the liquidity pool. It goes back into the unis swap pool in the

token itself. Uh and so it was that an incentive for people to use it. Uh what's your reaction? What do you think? Just like Robin Hood memecoins kind of woke them up to this possibility. I that's one reaction. The other reaction is just um it does seem like unis swap is shipping like shipping harder again and I'm wondering kind of why. I mean I know they were always shipping doing a lot in the background but it feels like some regulatory malaise has maybe lifted and they are getting back to trying new products and experiments again that that kind of feels different in unis swap land these days.

>> Yeah. Yeah. Uh cuz I I was talking to was hanging out with some crypto friends last night and like I we all said the same thing is like Hayden's tweets for the last two months feel more like founder Modi about unis swap and they're like shipping more things. >> Um yeah I I would agree. I think I maybe at some point just like the the safety nest of your treasury kind of like runs out and you realize that you need to like generate positive economics and you like unis swap as an or has been a pretty big organization in the past. Uh and again also to your point with the launch of Robin Hood if you go to the Robin Hood metrics like unis swap dominance in dex volume is

massive. So the number one decks on unis swap is on Robin Hood chain is unis swap v3. The number two deck is unis swap v2 and the number three deck is unis swap v4 and that's to combined 99% of dex volume on Robin Hood chain. >> Wow that's dominating on Robin Hood chain and that actually does go into the uni token fee burn. And so with the launch and success of unis swap on Robin Hood chain, the amount of uni being bought back and burned by the protocol has doubled because of Robin Hood chain, particularly because of memecoins. And so because memecoin activity on Robin Hood is is 50% of all memecoin activity in crypto as a total and all that volume

is on unis swap and so unis swap is burning uni tokens twice as fast versus like all the other chains combined. And so you can see like, oh, UniS swap sees value here, like revenue is coming in. This is working. The token hit like a like a like a 10-month high or an eight-month high recently, the uni token. And so yeah, like Robin Hood chain and unis swap have like kind of seen some like new life. And I think this is about >> can they keep this motion going? >> Yeah, it's very very good to see. Um, unis swap in motion. Clarity seems to be completely stalled.

>> Losing losing motion. >> Losing motion. So two weeks ago we at 41% probability on poly market 28% last week now it's 15%. So the there there was no filing of uh closure before recess. So that means it's not going in front of the Senate. Democrats are still holding out on the ethics issue. I guess the the White House compromises weren't enough and also they have other concerns. I think it's not going to happen this year for sure and we have to wait until the outcome of the elections to see if the new incoming Congress, yeah, the the midterms actually wants to pick this up or not. I don't think it passes. Um, we

may have lost our shot, may have lost our opportunity. I don't think that's the end of the world because we have a pro- crypto regulatory force and as long as we stack up enough wins and get enough momentum, there's no way future administrations can kind of unwind that. Like once Black Rockck has tokenized its assets was like Democrat administration, are they going to tell Black Rockck, Larry Frink, like hey, sorry, you got to undo all of that. That's now illegal. >> No, that that that uh will already be in motion. It will be too late. So that's probably the move crypto needs to do to get ahead of this.

>> I think there's probably a big loss for you like young startups and future startups because of clarity. And so yeah, Black Rockck is protected, but there are probably a bunch of theoretical hypothetical startups that won't exist because clarity clarity is not a thing. >> I think that's probably true. Uh David, good news on Cloud Flare front though. We've been covering them for a while. So what move did they make this week? They introduced Cloudflare wallets uh which I was pretty simple uh allow you to store stable coins, purchase services and re receive funds across the web. Um well it turned out new but Cloudflare using wallets is definitely new. Uh Cloudflare is basically the internet's uh firewall

and so if you go and to a website that is protected by Cloudflare, they have a little gate. So when we talked to Matthew Prince uh the CEO of Cloudflare, he was very into the idea of protecting the content of the internet from the Google AI crawler bots that extract your content and then don't pay you for it. And I think this is the first tool introducing uh like a wall between indiv usergenerated content on the internet and the bots of the of the internet scraping that content. And so he's trying to like protect users and make the bots pay for them. And so the idea is like this is actually a wallet for bots. Maybe maybe it's your bot. Uh but uh you need to pay in order to scrape

the internet and you need to pay the people who produce the content. And so uh the f first tool of like a big series of like mechanisms that need to be introduced for this vision to come into fruition, but it's pretty cool to see it in action. New this week out of the Near ecosystem is staking for Near AI. Okay, so you can now stake near token and then you get confidential inference uh you just get free inference because from the near AI uh part of near so you no there's you don't pay for it with your card there's no like cloud account you stake near you get inference pretty comparable to what Venice is doing where like you buy APA API credits and you get inference uh and also Venice uses near AI and so Near is kind of just building

its own vertical of hey we have distributed GPU clusters all over the world. That's the near AI product. If you stake near, you just get inference. David, that's a work token. Do you remember work tokens? >> It's a ility token tax. >> Very cool. Uh yeah, you're doing a number of things from a utility perspective. That's I think going to be accretive to the to the value of near. Yeah, I'm talking to Ilia today actually about like exactly how this works uh and why and how like what what NER really represents with all of this. Uh I'll definitely be using the work token as a as a concept to talk to him about it. Uh another another news on the week, Poly Market seeking investment at more than

20 billion dollar valuation. Ryan, what's your reaction to 20 billion? >> It sounds about right to me. I mean they are Yeah, it does. I mean >> prediction markets are markets Poly market is an exchange. Exchanges are product market fit. Hugely profitable business. Um prediction markets are going to increase in the future. Poly market gets a take rate. Uh I don't know. I haven't looked at the the math behind exactly how they're justifying this valuation. But what was it like 9 billion? Was it that earlier this year?

Was that a year ago >> during the uh the ICE deal talks? Um, and so 20 20 billion seems about right. I I mean it's the future. I hope they IPO like I hope or like there's a token or something. I hope Poly Market is becomes investable to retail investors cuz that's been the only uh the shame of this whole process. But um yeah, 20 billion seems right. What do you think? Do you think it's do you think it's maybe the prediction markets is overplayed? You see sports books coming back to take a chunk out of them? Uh sports books are coming back trying to take a chunk out of them. Sports books are valued in the twodigit billion range. So like 10 to like $30 billion is

the sports book uh like arena and then like what they're what prediction markets are going for is like the CME which is in the three-digit billion range like 100 to 200 billion. So it's still in the sportsbook range. I think everyone in crypto wants less of the sportsbook comp and more of the CME comp. But I don't >> but they're nowhere near getting anywhere close to the CME though. like a lot left to do on that story. >> A lot of competitors have entered, that's for sure. Including, you know, Robin Hood, of course. I know they're they're friend, but they could also do lots of things with their own prediction markets.

>> The Robin Hood's uh prediction market revenue is now 2x's it crypto revenue. And so prediction markets as a category, very lucrative, very monetizable. >> That's right. >> Last news on the week, uh, Arc from Circle mainet is coming September 16th. Ryan, are you holding your breath? Um, I'm not super excited about, but like maybe it's a backend infrastructure type thing. I don't know. It's another chain. Like I probably won't see it. So, not super interesting to me. What about you? >> No. [laughter] >> No. [gasps] >> Just uh before we close, David, like zooming out, >> where do you think crypto is right now?

Like are we lost in the wilderness? Is this another bare market where it's just like uh the tourists have left, the settlers stay? Does it feel different? Like what's your state of crypto right now? >> You do you know that uh there's a meme of the the girl watching the guy place like the square peg and the square hole and like the circle peg and but it always fits into the same hole. Like that's the joke is like it doesn't matter what shape it is, it always goes into the same hole and then you're like the circle it goes go it goes in the circle hole and it goes like that's right in the square hole again.

[laughter] And it's like I'm explaining this meme. is like, "Oh, meme coins again." Like, "Oh, Cena shape." Like, "Oh, we're doing meme coins again." And it's just like [ __ ] dude. Like, not DeFi is not great. Like, self custody not great. Uh, like it's just meme coins. And that it's a bit it's a bit frustrating. I've kind of capitulated it to just like, okay, well, like, they're at least fun and I'm having fun with my friends. Uh, but in terms of just like what we're doing on chain is like sick. We're doing meme coins again. Um, that's the new thing.

That's a bit frustrating. >> Yeah. But like what about I don't know there there's a lot that is working and has been set in motion and is kind of continuing to build I suppose. Right. So DeFi is actually working. It's growing like at a much slower rate than I think we hoped. >> Um, store of value that's still a thing and Bitcoin and maybe Ether at some at some point takes takes more of that. Those are some use cases that are working. Um, yeah. Yeah. May maybe I'm I'm being overly pessimistic. There are a bunch of things that feel like they're like kind of close but not quite here yet. Like we still don't have a very big ecosystem of tokenized docs, tokenized real world assets. There's like 17

competing standards and not one of them has really taken the lead. We need that in order for like per platforms to create a fully internalized per spot basis trade and which unlocks so much opportunity in the per platforms but we don't quite have that yet. Um so like there there's we feel like we're close but making really slow progress on that front and that I feel like is also constraining on like the creativity of what we can do here. Um, clarity was supposed to be really helpful with that, but doesn't seem like we're getting it.

Um, I don't know. You can you going back to like the market conversation, you can kind of see just like 9 months, six six months, nine months of boredom happening and then and then like there's capitulation and then and then you realize that, oh, actually wait, some of this stuff is working and like the rubber's hitting the pavement and then it'll work. Um, yeah, it just feels like a little bit like a waiting game right now. And then in the midst of that waiting game, people are getting hacked. >> I think that's right. It's a waiting game. I think maybe we talked about it earlier in the episode. People won't love crypto again. Investors at least, they won't love crypto again until they start hating AI. So that probably needs to play itself out, too.

>> Yeah. Yeah. All right. Well, Ryan, this is the first time we've recorded the rollup, and I'm home and you're elsewhere. So, go and go enjoy your vacation wherever you are, my dude. >> I appreciate it. Bank of the Nation, that was the weekly rollup. Thanks for being with us. Uh once again, crypto is risky. You can lose what you put in, but the institutions are here. So, we're going even further west. [music] This is a frontier. It's not for everyone, and we're glad you're with us on the bank's journey. Thanks a lot.