ROLLUP: ETH Beats SEC! | Trump Coin? | LayerZero Token

David
Dollar sign DJT, aka Donald J. Trump token that was allegedly started by Barron Trump with endorsement from the Donald himself. Or not. Is this real? Or is this a fabrication from one of the Internet's most hated persons, Martin Screlley? Zach XBT makes an appearance in the story.

Ryan
Bankless station is the third week of June and it is time for your bankless weekly roll up. We got a few things to cover today.

David
We got a lot of things to cover. It is a big week.

Ryan
All right, first on the list, the SEC dropped all charges against Ethereum. Remember they had these charges against Ethereum. They were actually going after the core devs in this consensus lawsuit. Well, that is no longer. They have written to consensus that they are dropping their charges against Ethereum. The question is, is Ethereum officially recognized as a commodity? I thought the ETH ETF would, would make it so, but maybe this is further evidence of this. What else?

David
One more nail in the coffin. And speaking of ETH, we are getting even more hints about when the ETH ETF will be trading.

It is very soon, so hold your breath. But before then, we also have airdrop. So airdrop season is fully on. Layer zero dropped their token this week. ZK sync token is now trading. There's some other airdrops coming as well. And so we're going to talk to you all about the tokenomics, what's going on, the sentiment reaction, and how these things are being priced in the markets and where they come to with some other projects out on the, out on the market today. And then, of course, Ryan, I'm sure you're going to love this one. Uh, do you know what's going on with the whole Donald Trump token, or have you been? No.

Ryan
And should I care?

This is my most hated agenda item. Like, so, David, you've done all the research.

David
I've done the research.

Ryan
Thank you for going into the gutter.

David
Fucking morning and discovering what's up with.

Ryan
The Donald J. Trump token. And how is the farmer bro, Martin Screlly, related to all of this? Burning questions in my mind, everything that.

David
Ryan wants to know. Before we get there, a moment to talk about our friends and sponsors over at Steve, stakewise protocol, offering universal or universal access to liquid staking, including for all of you solo stakers out there. So for all of you solo stakers who have been atlasing Ethereum, putting Ethereum on your back and not being able to achieve liquidity, well, you can continue to solo stake, you can continue to tend to your validator while also getting oseth. That is the sakewise liquid saken token to enjoy liquidity, playing around on Defi and Eigen layer and doing whatever you want to do with your liquid ethics while also being a solar stake sticker. There are also other things as well. There are vaults out there for people who want to just deposit their ETH and have mev strategies, flexible free structures, auto compounding, some other cool gadgets. Really just making just the world of staking in theorem pretty enjoyable.

If you are curious about any of this stuff, there is a link in the show notes to get started with. Stakewise.

Ryan
Yeah, very bullish on stakewise and their efforts to further decentralize our stakeholder. Well, let's talk markets today, and we got to start with king bitcoin on the kraken charts. Am I seeing up or down?

David
You are seeing down. You are seeing down. Down. 3% on the week. 66,800 is where we started. $65,000 is where we ended. Some negative flows in the bitcoin ETF's this week. We've definitely had some good weeks in, like two weeks ago. Uh, we've had some marginally bad, uh, outflows this week. Uh, so once again, uh, price, bitcoin price being correlated with outflows, uh, as well. Uh, bitcoin, however, like down 3%. If if most people's portfolio was only down 3% this week, they're probably, like, pretty happy because the rest of the market got absolutely obliterated. ETh did pretty good, actually. ETh is one of the outperformers in the market this week. Uh, but, like, if you were an altcoins, like, rip to you.

Ryan
Really?

David
Yeah. Even the meme coins, David, especially meme coins. Especially not the meme coins. Meme coins especially, got obliterated this week.

Some takes as to why bitcoin is just rising in correlation with the spy. Spy is just absolutely gigascending right now. Up just a whopping 1.5% this week. And remember, that's 1.5% of the world's largest capital market, so it actually does mean a lot of money. Um, but just, like, new all time highs in the equity market chart, it's pretty insane.

Ryan
This is the S and P 500 ETF. Okay? The most boring ETF that exists.

It's got to be, right? Well, there's probably some bond ETF's, but this is the most boring equities ETF you can own. And this looks like a meme coin itself here.

David
It looks like an up only meme coin.

Ryan
Now I'm scrolling out all the way to, like, 1993. But, uh, that is a beautiful ascent all the way to all time highs.

David
Yeah.

Ryan
For the s p. Yeah. All right. Are you getting jealous?

David
It makes a crypto person jealous, but also at the same time, uh, I mean, we all know that the s and p is just a, uh, index of money issuance, which crypto also is. Uh, when you zoom out to, like, 1990s, basically every chart looks good except for gold. Gold looks flat.

Ryan
Gold looks flat, sadly, yeah. Well, how does microstrategy factor into this? Because you were talking about bitcoin outflows, and that's on the bitcoin ETF, right. But Michael Saylor never, never outflows. He's always inflowing.

David
Only inflows. Yep.

Ryan
This is a tweet that says microstrategy has acquired an additional 12,000 bitcoin casual. A casual $786 million using proceeds from convertible notes, those sweet bonds and excess cash. So taking that fiat on some bond leverage real cheap and going and buying bitcoin and Michael Saylor's continuing to dollar cost average in. Does that help at all?

David
That definitely helps, yeah. Seven and $786 million of buying pressure definitely helps bolster up bitcoin. Anyone's meme coin bags do not have that same level of support that, that bitcoin has. How does Michael Strat microstrate still have, like, the tolerance to be able to do this? Like, why is there so much slack in the MSTR equity price that Mike, that Michael Saylor can continue to print MSTR, sell that for bitcoin, and have that pump the value of mSCR to the point where he can do it again, that was only supposed to work. And up until the point that bitcoin ETF's were approved. Because why would anyone buy mstr when there are bitcoin ETF's? The fact that the. He can still be doing this because.

Ryan
It'S a levered play.

David
Insane is a levered play.

Ryan
Yeah. You get the kind of the leverage you get, like potentially a little extra juice. Actually, there was a clip where Michael Saylor explained why MSTR is actually like, in some small ways better. I can't. I can't. Bitcoin exposure, all the details here because it's just like, I don't, I don't care that much. But it does have some advantages.

David
The micro, the market capitalization of microstrategy is at $25 billion.

Ryan
Crazy, right?

David
So, yeah, I guess that doesn't make sense because he has so much debt, because he has so much, like bitcoin so he's taking debt.

Ryan
I don't want to. I don't want to mess up that. Like, somebody's probably listening to this and, like, I know what you're missing here, but, like, yeah, there are some advantages with microstrategy for some types of investors and buying that versus a bitcoin ETF. The big question is when is when is microstrategy, the stock going to actually be present in this s and P? So I don't think it is yet. It's not part of the s and P 500, but it's getting real close in terms of size.

David
Yeah. Bitcoin doesn't have to go up that much more for, like, microstrategy to gain, like, a meaning. Like, it's.

Ryan
I have to accept it. Right. There's a formal gatekeeping process, I believe, to get an s and P 500. I don't know who decides these things, actually. I'm not tradfi enough to understand that, but we probably look that up, too.

David
Microstrategy has $13 billion of bitcoin on their balance sheet with a market cap of $26 billion. So half of their market cap comes from bitcoin, and they also have a ton of debt. So if, like, bitcoin doubled, which I expect it to, like, not in the not distant future, like, yeah, that would make sense. That would. That would. That would turn into the current market cap of the actual stock price.

Ryan
Yeah, that's what Saylor's betting on. It's, like, one thing I just want to zoom out on, because I've been thinking about personal finance, all the things that they don't teach you in school, because, you know, like, my daughter, my oldest daughter, she's taking her first personal finance class in high school, right? And so I'm just like, I don't know what they're going to teach there. And, like, I was thinking about advice I'd give to her. You know what? My first bit of advice is? Something I didn't figure out until my twenties, early twenties, fortunately for me. But, like, something that the system didn't teach me is if you don't own assets, you will be poor.

David
Yeah.

Ryan
Like, seriously, look at this chart. Look at this chart. They don't teach you this in school. They look at, like, okay, what's my job going to be? Like, oh, engineers make x amount of money in terms of salary. Like, salary doesn't matter.

Income doesn't matter. I mean, income is linear only to the extent that you could take your excess income from things you don't spend it on and, like, take that delta and profit and buy assets. If you don't buy assets, you are not in the game. I'm talking about any asset. It just doesn't even have to be crypto. Okay? Like. Like, very bullish on crypto, but, like, property, any equities, stock, like, not bonds, but, like, assets are the things you need to have, and.

David
Yeah, yeah.

Ryan
And, like, it's kind of like.

I don't know, when people hear this, they're like that, but it's not fair. Okay, it's not fair, but, like, it's the game.

David
Yeah, it's game. These are the rules, is how you make it more fair. The more assets you have, more assets you own, the more fair it is for you.

Ryan
Well, I just. I don't even think it's. I don't think it's fair either. Right. It's like, it's not great, but that's the system we live in. Tell me about EtH price, David.

David
First off, I love how you have your own tweet bookmarked. ETH Price starting the week at 3490 is for your daughter. It's for your family.

Starting the week at $3,480, up 2% on the week. ETH is up 2% on the week. Where we are $3,530.

Ryan
Why?

David
ETH was in just, like, the doghouse. It got down to $3,360.

Doesn't want to stay there. ETH continues to get pummeled and then bounces back, like, ready to go. It's like, oh, I'm getting slammed by the rest of the market. But I got an ETF soon, and it comes right back.

Ryan
It's not what it should be, though.

We're already, like, ETF announced.

David
We've already retraced, like, 60% of the candle. Look at the ETF announcement candle.

Ryan
I'm zooming out. 30 days. Here's that God Campbell candle. And I guess we're about there.

David
We're, like, approaching back to now.

Ryan
We have dates, don't we? We have some estimated estimate.

David
Very clear, specific estimated dates, which is July 2 is the new date that Eric Baltzunas and James Haver have moved their over under date two. So 50%. 50% chances. Under 50% chances over July 2. July 2 for what? The ETF going live products. The s product being approved. Yeah.

Ryan
Get some sweet inflows. Like, bitcoin has all those sweet inflows, and then we can look at the inflows and the outflows on a weekly.

David
Basis, and then we get to start talking about how it's bearish because grayscale has to actually still unload their ETH trust.

Ryan
Oh, yeah, whatever.

I'm not bearish. You know, it's got some catch up to do. I think it's going to make it. But here's the ratio. I guess we're. Are we up on the week?

David
We're up on the week. 4.5% on the week.

Ryan
Here, look it. I wanted to show you this ultrasound money update. Have you seen this chart?

David
Yeah.

Ryan
Like ultrasound money.

David
I can't believe Justin put this in here.

This is so dumb.

Ryan
This is the flippity.

David
I love talking about the flipping as much as the next guy, but this is the worst. Ta.

Ryan
It's not ta. It's not ta.

David
It's just ta, dude.

Ryan
No, it's just extrapolated line. That's all it is. It self adjusts the horizon. It could happen that the horizon always, like, the trend line always adjusts.

David
Oh, I see.

Ryan
I'm pretty sure it self adjusts. Anyway, if you can't see, if you're not watching on YouTube or Spotify video here, what we're looking at is a flipping chart for bitcoin or for ether flipping bitcoin. How close we are.

David
Yeah.

Ryan
And based on the trend line over the last nine years and 294 days, the estimated date for that, if we just hit the trend line, is November 16, 2026. That's when we flip in bitcoin.

David
Now, unfortunately, so much of this trend line is defined by 2015 through 2017. Like, if you actually just cut off those three years, the trendline is just, like, meaningfully different.

Ryan
Yeah, I posted. Ignoring that, I posted this on Twitter, and someone's like, yeah, it's been down only since.

David
It's been down only since 2017. But 2017 was a weird time.

Ryan
Yeah. That's a glass half empty take, I think, David, because, yeah, you know, theorem's doing things. It's.

You still believe in the flippity.

David
Yeah, 100%.

But I stopped holding my breath for it.

Ryan
How. When it happens, it'll happen. You know, we just can't force these things.

David
It'll happen our lifetimes. And if it doesn't, then you can't really come screaming to me.

All right, total crypto market cap, 2.495 trillion under 2.5 trillion.

Definitely down very bigly on the week because the long tail in the market this week got, like, kind of wrecked anything. All coins got wrecked anything.

Ryan
When you say all coin, we talking about everything below ether?

David
Yeah. So, like, Solana down 10% percent on the week.

Dogecoin down 12% Han down 5% cardano down 10% avalanche down 13%. Shib down 15%.

Chainlink down 6% polkadot down 12%. Uniswap flat on the week. Near protocol down 13%. Should I keep going or how you feel?

Ryan
Nah, that's good. We got a flavor. I got the flavor. Yeah. Let's get a flavor of layer twos these days. And this is a layer two update brought to you by mantle. We are not just off all time highs in terms of total value locked, but one thing to highlight this week, I think, is blob space, David. So blobs are catching a bid, and they were essentially. I mean, you correct me. I don't monitor.

David
They've been basically free other than very, like, acute instances.

Ryan
I was going to say that. That's basically what I thought. But now they have branched.

David
Now they're not free.

Ryan
Not free territory.

David
They're, like, firmly in not free territory for, like, the last, like, four, three days. Uh, the tre. There is a trend line on here somewhere. Yeah, right there. Average blob count per block. Uh, and that goes back to June 15, uh, so four days. Uh, that. That green line. Above that green line, uh, we increase the price of blobs. Below that green line, we decrease the price of blobs. Uh, being close to that green line is like, that's where things naturally converge to. We've been below that green line for a long time. Uh, but we are now poking ahead of.

Ryan
It only costs money on ethereum when there's contention. Right. When you're above the green line, basically. Correct.

David
Correct.

Ryan
Okay.

David
Yes. Uh, you can. There can still be contention, uh, when there's bull. When the, um, blob count is below the green line. If it was recently above the green line, it's like a control theory mechanism, much like EIP 1509. Uh, uh, but, like, we're awesome. We are starting to oscillate around the green line, which means that there is a market price.

Ryan
So we got more blob space in March. Right before that, there was kind of contention for Ethereum. Da. And then we got more blob space in March. And now it's June, the end of June, and we're already out of blob space. Is that what you're telling me?

David
We're filling blob space. Yeah. So, like, all the layer twos are just slowly growing in more activity, like, incrementally. Like, incrementally growing in activity. So they are buying more blobs. In addition to that, more layer twos are coming online.

And so, you know, multiply volume times capacity and, like, you just get more space or get more demand. And then, especially this week, is both. ZK sync has been consuming a lot of blob space to claim the ZK token. And then also Zro, you can claim the token. Interestingly, because layer Zero is an omni train protocol, you can actually claim the zero token on any chain, which is what their deal is. That's what they do.

As a result of that, most people have been claiming on arbitrum, I think they've been maxing out the TPS on arbitrum, actually. Can you go to the layer two b and look at the arbitrum activity? I'd like to actually see that. But because you can be claiming your layer zero tokens right now, tons of people are consuming blup space, so we're probably hitting new all time highs. And lane true activity, specifically because of the layer zero activity.

Ryan
Let me look at activity here.

David
Yeah, yeah. Activity on the left side.

It did move if you were like, what the fuck's going on?

Yeah, look at that 20 x scaling factor. Whoo. All right, baby, let's go. That's also because of the new layer two that's on the scene called Xi, which I've never heard of. Uh, but, uh, in addition to that, like, base activity is at all time highs. Uh, and I think if you scroll down, arbitrum will be there too, as well.

Ryan
That's pretty cool.

David
Yeah.

Ryan
Liking that arbitrum one.

David
Yeah.

Ryan
Can we talk? Talk about Dex? Let's talk about Dex. Uh, okay, so I saw this, uh, um, headline. Base surpasses binance chain. In terms of active dex users. Binance chain was kind of a juggernaut for trading last cycle.

David
It's been for a long time.

Ryan
Yeah, has been for a while, right? I mean, that makes sense. Uh, uh, like, coming from the exchange, their exchange routes and base surpassed it. The broader context here, though, we're looking at some charts. So we've got users which base just surpassed binance and is now number two in terms of total dex users. Number two to actually solana. So solana is number one and then base number two now. And then binance number three. Doesn't come close in terms of volume, though, which is kind of a difference. Anyway, what do you make of these charts? We're looking at Dex volume by different layer twos, and Solana and Ethereum, and then also Dex users. What jumps out at you as we.

David
Look at these charts that there is a discrepancy between volume and users.

Users, actually, it's dominated in growth by Solana. Actually, that's the biggest chunk of unique users over the last year and definitely seen an unprecedented amount of growth.

But then, on volume, Ethereum layer one is still by and far the leader, followed by Solana. You can kind of see Solana meme coins when they really started going around in March of 2024.

But Ethereum still has by far the actual majority of volume. And that is also, by the way, the most Sybil resistant, because Ethereum layer one is you got to pay fees. So there's not much, a lower percentage of volume per bot or bot volume there, simply because you have to pay a lot.

Ryan
92% of Solana's Dex volume is meme coins right now, which is, like, just been a huge meme coin cycle. Um, one other thing I want to talk to you about, David, because this was sort of cool. Flipping back to the ETF world. There are now 19 before filings. These are sec filings for not just a bitcoin eTF. Oh, well, that's already been approved. But not just an ethereum ETF, but now a combo ETF where you get a little bit of bitcoin, a little bit of eth in the same ETF wrapper. I think it's a 75%. Oh, no, 70% bitcoin, 29% eth.

David
This is, like, market cap rated. Yeah, market cap weighted.

Ryan
Market cap rated. It's adjusted that way. And I listened to your episode with. With Matt from Vanek guys out last week.

David
Yeah, you were.

Ryan
But both he and Matt Hogan, they make a really compelling kind of, like, tradfi argument for why it makes sense not just to hold bitcoin, but why it makes sense to hold bitcoin and ether if you are looking to maximize your sharpe ratio and which is a boomer term.

Well, sharpe ratio. I don't consider sharpe ratio very much when I think about, like, investing, but, like, sharpe ratio is sort of a measure of volatility. How much could the price move either up or down in a given year?

David
And it's presented to trad five people as risk. Yeah, risk, which is dumb and wrong.

Ryan
But I think it's dumb and wrong. I've never seen the world like that. But that's fine for some people. Like, if they, you know, they get scared when something drops 20%. To me, that's, like, scary. Called a. That's called a Thursday, you know, like.

David
So.

Ryan
But anyway, um, the point of the. The point of this is, if you even go with a 75% bitcoin, 25% eth, uh, combo inside of your portfolio, not only do you improve your sharpe ratio, that actually gets better, but you also, uh, improve your returns.

So from a portfolio diversification perspective, which appeals to a lot of, like, fund managers, active managers, and tradfi, this is a way to, like, get more squeeze the juice. This is like the value of diversification. You know how when people talk about diversification, this is what they're talking about. There is actual mathematical value, right? If you. If you care about sharpe ratio and.

David
Sort of if you care about sharp.

Ryan
Ratio, volatility adjusted returns, right?

David
So when I see this data, I'm like, okay, so if, according to their mathematical models, if you add ether to a crypto portfolio in addition to bitcoin, your returns, likely according to the models, go up. But your. And also, so does your sharpe ratio. Uh, my head is like, if your returns go up because you add ether, wouldn't your returns go up if you only had ether? And it turns out the answer to that is yes, but your sharpe ratio goes down, which is why they don't do it. Cause they're like, ooh, too much concentration.

Ryan
Well, that's. As an active manager myself, I'm just like, well, then I'd rather have ether. You know, like, just give me 100% ether.

David
Exactly. But that's concentrated bets, baby.

Ryan
No, that's not how sophisticated investors see these things, but cool stuff.

David
Yeah.

Ryan
From a diversification, diversified portfolio perspective. Last thing to talk about in markets, airdrop season. It's in full swing. ZK sync is claimable and tradable this week. So, David, I want to hear about that. Also, layer zero zero token just debuted at a unicorn valuation. Got some other things going on the blast ecosystem, but those two, at least. ZK sync and zero. The layer zero token. What do we need to know?

David
Okay, introducing Zro. That is the ticker symbol for layer zero. 1.28 million wallets are eligible, which is absolutely massive. That might. That might be the number one in terms of, like, a total wallets. Okay, so total supply of zero is 1 billion. The 24% went to the community and builders. Eight of that eight and a half percent is being distributed on day one. The rest will be coming up for in the future.

And so, in addition to that, in order if you are eligible to claim layer zero, you also have to. This was like the weird quirk thing. You have to donate to protocol guild. So to claim your zero token, you must donate $0.10 in USDC tether, or native ETH per layer zero that you want to claim, which goes directly to the protocol guild, which is a GitHub.

Ryan
$0.10 or higher, right?

David
$0.10 or higher per token. Per token, yeah. Uh, and so how much is a. Is a layer zero token in this present moment?

Ryan
Um, $3.67.

David
Okay, so you have to. You got to donate 1010 cents to the. To protocol guild. Protocol guild. Fantastic organization. They fund open source development. Uh, I'm not sure everyone enjoys being forced to pay money to claim their.

Ryan
Token, so this is what the founder said. It's not like being forced, necessarily. It's like, um. Are you being forced to claim? No, you just don't claim. If you don't donate, you don't claim that you like.

David
That's a little. The community's gonna accept that one. I.

Ryan
We'll get to that take at the end. I feel like the community is getting more and more entitled these days, but, uh, yeah, proceed.

David
Uh, okay. Uh, let's see. You. I talked about this earlier. You can claim this anywhere. You can claim this on Ethereum mainnet, on optimism on arbitrage based polygon chain avalanche, any EVM chain. Kind of cool. Uh, and why can you do this? Well, that's literally what layer at layer zero does. It is a messaging protocol across chains. You have until, uh, September 20, 2024. Uh, layer zero dot foundation slash claim. Please stay on the lookout for phishing. Uh, don't click any links that you're not very sure about. This is also in bankless claimables if you just want us to do it for you, which is why we do it. Uh, that is layer zero. Uh, congrats to Brian Pellegrino, who's just worked through the absolute gamut of just, like, processing Sybil information. I'm pretty much looking forward to, like, the post mortem on just like, the layer zero, perhaps the most Sibyl airdrop of all time, and then also had the most, like, uh, complex and, like, rich anti Sibyl strategy as well.

Ryan
So it was innovation there. Some innovation, I think.

David
Big time. Big time. So if you're in the bankless, uh, citizens discord, there is a forum. Just so, like, I just spun up this morning to go chat about this. Would love to get your feedback. Want to know what you think, uh, if you are eligible. Uh, the cool thing about that discord is that it's as gated to paying bankless citizens that we know are humans. Uh, so we kind of know that there's no symbols in there, uh, kind of useful. Um, and that brings us to Zk sync, the ZK token. Uh, like I said, we process, we were processing this as an industry all last week, all this information. Uh, ZK is now trading out on the, on the market. Claiming is now live. Uh, so market cap, $740 million, a $4.2 billion fully diluted valuation. So with a total supply of 21 billion tokens, it's got a 17.6% float, which is like, definitely way healthier than other, like, tokens that other, like, typically get introduced. 17.6%. Like, 17.6% is still like a long way off from, like, you know, the majority. Uh, but typically we've been seeing tokens with higher is better, higher is better, higher is better. Um, and so, like, and that's a nice healthy float to have. At the start, almost 50% of the airdrop was claimed in the first two addresses, claimed by 225,000 addresses in the first 2 hours, overloading some of the RPC services. But otherwise, other than that, everything is fine.

Zksync. They released a comment about the community's reaction. This was out last week, but since we didn't talk about it, Brian, they said, our airdrop is unconventional and has its imperfections, but we are proud of the path we have chosen and believe that we have made reasonable trade offs. We recognize that many people are upset having received less than they expected. We spent several days and nights double checking the data, but didn't identify any major issues. Uh, we recognized that communications weren't clear enough and they sent out a list of frequently asked questions. Uh, this was definitely one of the bigger conversations in the bankless discord. Uh, a lot of individuals just came in and dropped in their comments because they asked them to, like, hey, what do you think about the ZK sync token? People were like, I feel pretty good about it. Um, some people said, like, I was using Zksync Lite and Argent and I wasn't eligible. I noticed a common theme about that. And then anyone who was satisfied kind of moved on from the conversation because why would they hang around? And then other people who had problems and grievances, they definitely continued that conversation. There was overall, I think last week there was a big conversation about what do about the ZK sync airdrop. And I think, you know, it's very hard, especially in our position where we are bombarded by messages to really discover truth.

And so still kind of like looking through the post mortem on that. But nonetheless, ZK sync is like, uh, we understand it wasn't perfect, but like, we got pretty close to what we want and we're pretty satisfied with it, so we're moving on and that's that.

Ryan
My big question was like, what's going to happen in aftermath? And this was super interesting. So 24 hours after the ZK airdrop became, like, claimable and tradable, uh, 28% of people didn't sell any of their ZK David, but 30% moved or sold some of their ZK from their wallet. And 40, that, that's just a portion. And the 41% moved or sort sold all of it. Are you seeing these numbers? So 70% sold some portion, 40% sold all of it, the entire allotment. What, what do you make of that? What's your takeaway?

David
I'd like to compare this with other airdrops.

I mean, the Zksync, they gave away 17.5% of their total supply, which is a lot. And so you would expect that market cap to fully diluted, ratio setting in, you're seeing a lot of tokens with a lot of unlocks just getting hammered in price because people are bearish unlocks right now. And ZK sync just had like the biggest day one unlock of all time. And so you would expect, like, a lot of selling pressure to come into the market.

I'm happy to see a large amount of day one selling pressure because that means, like, it's a more investible asset, the more that's unlocked.

Ryan
I guess that's liquid. It's price discovery, that sort of thing. But like, another interpretation of this 40% moving is like, how many of those are mercenary? Sort of like airdrop hunters or civil attackers that are just taking their money and selling.

David
I think by definition, if you sold it inside of the first week, you are by definition mercenary. Which is fine. Which is fine. It's totally fine.

Ryan
I guess it's fine. One other question I had is benchmark this. All right, so what'd you say? $4.1 billion FTV for ZK sync? Something like that. Over 4 billion. So how does this stack up compared to other layer twos? I was actually looking on Coingecko. Okay, top 100 and Coingecko. And I sorted by market cap. So this is not FTV, but market cap. David, ZK sync didn't show up in the first 100. It's like it was like 106 or something.

David
That's what I saw. Yeah.

Ryan
Okay. Like 4 billion. 4 billion doesn't seem like a lot for z four.

David
4.2 billion is fully diluted. And it's not showing up on the top 100 of the market cap because it only has 17.5% of that on the market.

Ryan
So benchmark that with other layer twos, and let's just do fully deleted, just fully diluted valuation.

David
Okay. So in order of highest to lowest fully diluted valuation, we got arbitrum coming in at number one. $8.1 billion. You have optimism coming in at number two, which is at $8.05 billion. Kind of crazy that they're basically the same. Followed by Polygon at $5.8 billion. Followed by ZK sync at $4.1 billion. And just because it went live this week, even though layer zero is not a layer two, it's a layer zero.

$3.7 billion. And so, like, all within, like, a decent range of each other.

Ryan
Those are in decent range. I'm going to give you some other comps b and b. $91 billion. Solana.

David
Okay. BNB has buying and burning BnB tokens.

Ryan
Ton coin, the telegram pawn ton. $36 billion. Cardano, $17 billion. Oh, my God. $12 billion. Tron freaking Tron. $10 billion.

David
Also has a buyback and burn model.

Ryan
Polkadot. $8 billion.

David
Okay, that one's dumb. Bitcoin cash. $8.2 billion. Bitcoin cash is worth more than optimism.

Ryan
What the f. Layer twos are not catching a bid right now.

David
Hey, uniswap. $10 billion.

Ryan
That's not layer two.

David
It's a good token.

It's a cash flowing token.

Ryan
It's a token that has bankless fundamentals.

David
Fundamentals which are apparently extremely bearish.

Ryan
Very bearish right now. Like, that's a larger question about this. So we've gone through some major airdrops in the last few, including the ZK sync. One has been met with some upset.

David
From the community social mess.

Ryan
I saw somebody in bankless discord. This is a real human just being like, you know what? I'm just exhausted from airdrops in general. Right? And I think that's true of people who are doing things on chain and getting airdrops. I think it's true of founders, too.

David
Oh, my God.

Ryan
Right? So this is a Kobe tweet. If you're a founder, in my opinion, you're probably thinking about not doing an airdrop at all these days. The downsides are much greater than the upsides. Now, I do think that with layer zero, Zksync Eigen lair, it's marking a different era of airdrops.

David
We jumped the shark.

Ryan
There's still going to be air drops. So I think they will morph into a different form and we'll have to see what that new form, the new meta ends up being because people are kind of tired at this point, both projects and like users.

David
Yeah, well, the Sybils are just crowding out the users and then the users are like, I feel, not heard unheard.

Ryan
Because they're drowned out.

David
Yeah, because they're drowned out. And so like when you real users get pushed out, like the meta is going to shift. This was the theme of that episode that we did like a couple months ago where we called the cycle is cooked. That's the same thing. Just like we got to move on from this distribution method.

Ryan
Yeah. Do we have to talk about mother and daddy?

David
Do we? You don't. I'm just going to burn through these things because it's the thing that everyone wants to hear about. The mother plus daddy daddy update. If you don't know what daddy is, good for you. But I'm about to inform you. Sorry. Mother, of course, is the Iggy Azalea token, who issued a meme coin on Solana and just started to grow a community around it. And honestly didn't really do anything egregiously bad so far. So that's kind of nice.

Currently $80 million market cap off of its $150 million market cap peak. She's still active, mostly just sharing memes, kind of the deal. She appeared last week with Jim Cramer at the New York Stock Exchange.

Oh yeah.

Ryan
When mother ETF.

David
When mother ETF, like $80 million. She hasn't like exe scammed, hasn't done anything egregiously wrong.

So like, not going to call it a complete grift, daddy, which is our favorite. Who's this, who's this guy again? Andrew Tate, daddy Tate.

Andrew Tate. The best human, the best leader, the best example of a human on earth.

$64 million market cap off of its $90 million peak newer coin.

So that is the current state of celebrity meme coins.

Ryan
This token is not affiliated with the Andrew Tate.

You know that it says there's a warning on Coingecko.

David
I thought it was.

Ryan
I don't even.

David
Wasn't it? I thought that was the whole deal. Like everyone knows to not come to banks.

Ryan
Is this a different, is this a different token?

David
No, I think this is the one.

Jesus.

Ryan
Yeah, there's only one daddy Tate.

David
Well, if you had any, if you had any better indication as to like, where you should get your meme coin information, it's not from us. But nonetheless, we're going to talk to you about dollar sign DJT, aka Donald J. Trump token that was allegedly started by Barron Trump with endorsement from the Donald himself. Or not.

Is this real or is this a fabrication from one of the Internet's most hated persons, Martin Scrilly? Zach XVT makes an appearance in the story. So we're going to Ryan's going to go grab his popcorn right during this commercial break and then we'll be back. We're also going to talk about how Ethereum is now free and forever free of the SEC's investigation. But first, I want to talk about some of these fantastic sponsors that make this show possible, like Kraken with all of the meme coins or the legitimate assets that you want, you can find them on Kraken. If you do not have an account with Kraken, consider clicking the links in the show notes getting started with Kraken today if you want a crypto trading experience backed by world class security and award winning support teams, then head over to Kraken. One of the longest standing and most secure crypto platforms in the world, Kraken is on a journey to build a more accessible, inclusive and fair financial system, making it simple and secure for everyone, everywhere to trade crypto. Kraken's intuitive trading tools are designed to grow with you, empowering you to make your first or your hundredth trade in. Just a few clicks and there's an award winning client support team available twenty four seven to help you along the way, along with a whole range of educational guides, articles and videos with products and features like Kraken Pro and Kraken NFT Marketplace and a seamless app to bring it all together. It's really the perfect place to get your complete crypto experience.

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All right, Ryan, you got your popcorn?

Ryan
I got my popcorn. Like, literally.

David
Yep. All right, Ryan's gonna sit down.

Ryan
Is it story time?

David
It is story time.

Ryan
My God, this is the first time I'm paying attention to this. So what is going. What do we need to know about Donald J. Trump coin?

David
Okay, Donald J. Trump coin was issued a while ago. Actually. It's currently got a $166,000,000 market cap, which is like, sums priced in. Something's priced in there. This all got started from a pirate's wire tweet started per conversations. Trump is launching, launching an official token dollar sign, DJT on Solana Baron speed heading, spearheading. That was, that was.

Ryan
That's Mike Solana from pirate Wire. You know, we're having Mike on next week, actually. Cool.

David
We talked about this. That's perfect timing, right?

Okay, so that's how it all started then, just to recap all of this, I'm going to actually just go through this whole entire thing. This made some headlines. Not big mainstream headlines, but this is making some headlines in, like, b tier media, trad media, like Newsweek. Like, the headline here is Baron Trump behind mysterious new DJT coin. What we know.

Ryan
Yeah, look, we made it to Newsweek. Cool.

David
Yeah, exactly. Yeah. Okay, the part, part of this, the first line of this Newsweek article says, convicted Pharma bro Martin's Kreli has claimed a cryptocurrency partnership with Barron Trump, the youngest child of former US President Donald Trump. Okay, so here's how all this went down. Martin Screlley has been on, is on crypto Twitter. Has been on crypto Twitter. He's part of the crypto world. Um, unfortunately.

Ryan
Do people remember who he is? He's the guy that jacked up the insulin prices, right? Went to jail.

David
He's the guy that jacked up the insulin prices of Daraprin, like, by 5000%, uh, which, like, became, like, the most hated man on the Internet. Like, hated by Reddit. Uh, went, uh, got charged for securities fraud unrelated to the whole, um, pharma thing.

Ryan
Oh, right.

David
So got charged for securities fraud, uh, went to jail for, like, 21 months or something. Uh, had, like, seven and a half million dollars of his assets seized, which included the one of one wu Tang clan album, which was then auctioned off by the government by Pleaserdow, which is a separate story, which is also happening right now. Uh, that we actually talked about that last week. But that is, aside from what's going.

Ryan
On, he's in my Twitter timeline, like. Like, he's trying to get into, like, crypto Twitter circles.

David
Be relevant. Yeah, yeah.

Ryan
Okay. Maybe that's part of the story here anyway.

David
Definitely a part of the story.

Ryan
I'm joking.

David
Martin's Kreli is, like, causing a storm on Twitter, saying, yes, this is real, I have proof. And everyone is like, WTF? Like, what? Why are you relevant here?

Ryan
That Barron Trump issued a Donald J. Trump meme coin.

David
This is a Baron Trump issued meme coin.

Ryan
Like, Trump endorsed and by Trump endorsed.

David
Or maybe Trump endorsed.

Ryan
Trump endorsed.

David
Yes.

Ryan
Okay.

David
Yeah. And so, like, people were spending, like, hours on Twitter spaces listening to Martin scrawly, like, try to, like, prove that he could, like, link this to Barron Trump. And Baron Trump is, like, nowhere to be found.

So, like, what's up with that he's.

Ryan
Never, like, he's never been in the public eye. Right?

David
If podcast listeners are like, Ryan is legitimately eating popcorn. That's why what you hear, he hasn't been. Yeah, I mean, maybe. I don't know. I haven't. He's not in my public eye.

But, yeah, he's on Twitter spaces claiming that he works with, like, up to 50 people, including to, like, work on this token, including 18 year old Barron Trump. He's 18 years old. Um, people. And so as a result of this, like, DJT is pumping. Like, it rises up past $100 million. Is like, pumping. People are, like, talking about it, trading it. It's like generating hype. Uh, and then there is an Arkham intelligence, uh, Twitter account saying, fuck it. We ball $150,000 to the first person who can definitively prove the identity of the creator of DJ t. Like, we're not taking Martin's Crowley's word for it. Somebody do some on chain forensic evidence, uh, to, uh, prove who is the creator. Uh, not just a few hours later, Zack XBT tweeted out that he submitted evidence, uh, and then Arkham intelligence. Yeah, Arkham intelligence. Then later tweets out, uh, that the bounty has been solved by Zack XBT, who says that it is indeed Martin Screlly, who is the person that minted that created the DJT. Uh, Trump token. The Trump token. Martin scarely did it.

Ryan
Martin's been saying he did it the whole time, though, right? Is this. Or is it?

David
But he is saying that he did it in collaboration and with the endorsement of Barron Trump, who did it with the endorsement of his daddy, Donald Trump. Okay. Okay.

Ryan
Well, I heard, by the way, I heard Martin had DM's or something like evidence.

David
Yes. Okay, so this is where this goes. This is where this goes.

The link that Zack XBT found was that one of the earliest sellers of DJT, which sold, like, sold $800,000 at this token, sent it to an address that held was a large holder of Martin's other projects, Shoggoth, which is another AI project. So, like a pretty direct link there. But then this is where Martin. Martin bites back. There's a phase two. We're not. We're not done yet. You would think that this would be over because this is approved, but no, like, Martin. Some people think Martin has actually, like, vindicated here. So there is a user, Cameron rocks, a discord user whose alleged real name is Cameron Roxburgh, that Martin Screlley apparently hired as his intern, a summer intern kind of position to do something in, like, Martin Screlley's office or something.

And this person apparently went to school with Barron Trump and talks about going to school with Baron Trump. Apparently, he's a longtime friend of Barron Trump. And I think this actually part actually checks off. So Martin Screlly paid this old school friend of Barron to be a part of his, like, campaign to get close to Barron Trump. So this is where, like, the conspiracies come in. And Martin Screlly was, like, apparently just kind of, like, social engineering his way to get to Barron Trump to, like, launch a Trump meme coin, because this is just, like, perfectly on brand for Martin Screlly. This is, like, what he does. The guy. Guy, like, of course, a 16 year old.

Ryan
A 16 year old Bo Louden to shell the token that that's what you're talking about is that I don't know.

David
Who bao Louden is, but there's, like, a friend of Baron Trump who, like, was the conduit between Martin Scarley and Barron himself.

Ryan
All right.

David
Yeah. So this is. So I think this is how this all ties together, because Martin Scarly, we haven't gotten to the point where there's actually communications between Barron Trump and Martin scrawly. We're about to get there TBD on if they're real or not. They could be fake, but they could be real, too. So here's how. Here's how we think this all went down. Just to really, like, summarize this, Baron Trump receives a message from Martin Screlly because of this conduit that he has, like, the friend. The friend that bridge the connection. And he was like, hey, dude, this is gonna be super sick. If you, like, launch a meme coin, you should. You should ask your dad. So Baron asked, daddy, Donald, hey, dad, I'm thinking of launching a crypto coin. Is that okay? And, like, his. Donald Trump is like, sure, whatever. Well, like, not being sufficiently informed about, like, wait, wait.

Ryan
This is your speculation?

David
This is my speculation, okay? I also, I have, like, you know, friends and sources who are in the trenches who are more informed than me. So I'm, like, kind of, like, regurgitating what other people have said.

Ryan
All right, all right.

David
I've had this. I've had this take corroborated by two people, all right?

Ryan
But. But it is a little conspiracy. We'll never, it's conspiracy.

David
We'll never completely know the truth, but continue. So, like, yeah. Barron Trump goes to Donald Trump, asks, hey, daddy, can I. I'm sure he says, daddy, can I launch a crypto coin. And Donald is like, yeah, whatever, sure, I like crypto. I'm the crypto president.

So Baron says, like, okay. It goes back to Martin script. He's like, okay, I've got the green light for my dad.

I can launch a crypto coin. And he names it DJt Donald J. Trump.

And then it starts to blow up. And the Trump campaign and his lawyers, like, like, is totally caught off guard about, like, what this actually means because it's massive legal spotlight, like, not what Donald Trump wants. Donald Trump has other legal issues going on, and they just totally shut this down. Like, baron, you can't do this. Basically, you're grounded. Like, go to your room.

And then this is where we get this watcher guru tweet who says, Donald Trump's former adviser says that the president and his son have not launched a meme coin. So, like, official statement out of the Trump administration saying, like, that morning is.

Ryan
Thursday morning that we're recording. That's when that is correct.

David
This morning, 08:00 a.m. eastern time this morning. Yeah, yeah. And so basically, the Donald Trump, like, formally severed all association. But then this gets even crazier when GCR and Martin Screlli GCR, like, makes a bet saying, like, $100 million that this is not endorsed or at all.

Ryan
For people who don't know.

David
I think a crypto Twitter influencer, trader type. Very well.

Ryan
Traitor. Like whale type.

David
Yeah, exactly. Exactly. He puts out a hundred million dollar bet saying, like, I bet $100 million that this is completely fake. And Martin Screlly is like, I'll make that bet. And I think Martin Screlli is taking that bet, like, on a technicality because he did have a conversation with Barron Trump. He had, like, a Zoom call with him. And, like, Barron Trump was there. And so, like, he's saying, like, it's not completely fake. If you define as completely fake, that's wrong. And so I'll take that bet. And so people start, like, tapping in. Kobe is like, Kobe, do the escrow.

And so this is where Martin.

Ryan
Kobe.

David
This is where Martin Screlley shares a screenshot with, allegedly, Barron Trump. I think this is on Instagram. These are Instagram DM's.

Ryan
Wait, this is Instagram?

David
Yes, this is Instagram. Yeah.

And so this is Martin's crelly kind of like, goading on Barron Trump saying, you are the guy, not your dad. You're going to be bigger than him.

And then he says, like, Martin, hop on with us. Can you send a Google Mees league? Also not, I don't want to, I don't want that. I don't want to be bigger than my dad. But this is like, Martin's proof that he was, like, talking to Barron Trump.

Ryan
But this doesn't show Barron's name.

David
BT is in the left corner, which, like, maybe it's him. Yeah, maybe it's him. It could not be him.

Ryan
But doctored, I mean, like, there's all.

David
Sorts of, it could be doctored. Yeah. Apparently there are people who were, like, in this call with him who have corroborated this story.

And so, like, it's actually generally accepted that from the rumors, from the rumor mill in the trenches that, like, this was Barron Trump who did launch a meme coin with, like, launch unproved, maybe social engineering with Martin's Grelly and Martin. I think as soon as Martin screlly got Barron Trump to legitimately launch the token, he was like, let's fucking go. I did it. And then he, like, just throws Barron Trump by the wayside and he goes on to crypto Twitter and it's like, it's a Donald Trump meme coin. Like, it's totally legit. Like, it was technically, like, launched by somebody in Donald Trump's circle. The Trump administration is like, this isn't us. We have no, we're not endorsing this whatsoever.

Ryan
Have nothing to do with Screlly making money on this or something.

David
Yeah, because he has, because, like, Zack XVT says that it was Martin Screlly's address that launch a token means he has all the supply.

And, and then you also have this screenshot and there's a different screenshot that we're not showing where Barron Trump is asking Martin, like, yo, did we add like a trading fee? So, like, you could, like, make a 25% or 25 bits, like, fee for anyone who's trading. He asked, like, Martin Crowley the details on that. Uh, and, and so, like, I think Martin's Crowley launched it. I think he took like a Zoom call or a couple with Baron Trump to go to Mon.

He like, socially engineered Barron maybe, or something like this. Uh, and so it technically, if, like, there is a bet out there saying that they're $100 million, that this was completely fake in the definition of completely fake, it actually doesn't, it's not completely fake. Like, Baron Trump was actually here.

Ryan
How weird. But it's just, it's not, like, official Donald Trump.

David
It's not official. And like, all the entire Trump campaigns, like, we are not endorsing this is not us. So if you're buying the DJT, like, token, thinking that Trump is going to endure the endorse this, you're wrong. You're basically just buying it because, like, it's in social zeitgeist. I actually think we kind of got lucky here, and maybe we actually don't get lucky because this is, like, not a good look by the crypto industry because a fuck Martin's Kreli. But, like, representing the industry. He's going to, like, he's the closest, one of the closest people to the Trump campaign and, like, maybe got his son to, like, commit some sort of financial crime, like, doing something nefarious by launching and promoting a meme coin. Imagine you're the presidential candidate's dad, just found out that you launched a meme coin with his initials. Like, not great. And, like, we have this pro crypto president who might have just gotten burned by fucking Martin's Grelly. Like, it's not what we want.

Ryan
So you're saying it didn't go far enough for that to be, like, a big issue, but it could have. It could have gotten worse here.

David
If it does get any bigger, it's getting bigger, like, today and tomorrow.

Ryan
Yeah. The other thing about, like, I wonder with Screlly, I mean, he's already had, what, securities violations? He's already served time in jail for, like, financial crimes. Like, no, there's got to be some injunctions here. Like, there's got to be some prohibitions from him doing this sort of thing, I would think.

David
Yeah, I think Martin Scurlay just saw an opportunity to, like, sow chaos.

Ryan
Yeah.

David
Grift a bunch of people and, like, take clay clout for it. Even though that clout is negative, he'll take. He'll take all the negative clout any day.

Ryan
Well, I'm done with my popcorn for now, David, so thanks for the story time. I would not have looked that up on my own because I just, like, didn't care enough. But, you know, it was entertaining. So thanks.

David
Glad you're entertained. Thanks for entertained.

Ryan
You know, it's something cool this week, though, that you're going to keep your.

David
Sunglasses on the whole rest of the podcast.

Ryan
Um, just until the break. How about that? Just until we get through this section.

David
All right?

Ryan
Because this is a big deal. Sunglass worthy Ethereum surviving the SEC. That is the headline from consensus today. We're happy to announce a major win for Ethereum developers, tech providers, industry participants. The enforcement division of the SEC has notified us that is closing its investigation into Ethereum 2.0. So bankless listers might remember was like a month ago, we had Joe Lubin on the podcast, and consensus had just announced that they had received a wells notice from the SEC that described some of the allegations, one of which, like, metamask wallet, all of these other things, but one of which was basically an investigation into Ethereum. And whether, like, there was the allegation that possibly core devs were essentially controlling this, maybe consensus employees, they were looking at githubs, they were looking at commits, they were looking at all of this detail. And Joe Lubin and the consensus lawyer was pretty convinced that the SEC was coming after Ethereum, and it very much looked like it. Now, that was pre Gensler, pre SEC pivot, which it seemed like if we're again doing some conspiracy theory type stuff, it seemed like. Like there was a call made by the White House and the Biden reelection campaign that told Gary to chill the f out and like to approve the Ethereum ETF and do a 180. And Ethereum ETF got approved, of course. Like, you guys were here, you remember that story. Seems like part of that fallout was a withdrawal by the SEC on this allegation against consensus and ethereum as a security.

So do we have some comments from the consensus lawyers here? This is Laura Brook over who we didn't talk to, but what is she saying here?

David
She says, the SEC sent us a closing letter in the Ethereum 2.0 investigation today. Things have changed remarkably fast since we filed our lawsuit against the SEC in late April, cumulating in today's development. After more than a year, the ethereum investigation is finally over with no charges against anyone. Full statement here and then a link to the blog post. And I just really want to, like, lay down in, like, very simple terms what this means. There has always been this, like, looming, overhanging cloud over Ethereum. Like, is it a security?

And a lot of that cloud got dissipated with the Ethereum ETF, and any remaining wisps of moisture in the air that might have potentially turned into a cloud is gone.

There could not be any clearer skies. Like, it is an official thing by the SEC that they are no longer investigating Ethereum, the Ethereum project, the Ethereum network, the Ethereum core devs consensus, the whole idea that Ethereum might be labeled as security is in the grid. It is over. Which has been a thing that has been, like, frustratingly relevant for my entire time in crypto people.

But, like, Ethereum could be a security. I'm like, yeah, but let's, you know, like, M and Ms could be security. Whatever, beanie babies. But, like, finally, like, if anyone tells you that Ethereum is a security, you can tell them that they are dumb and wrong, officially.

Ryan
Yeah. And, like, here's another takeaway, I think that hopefully crypto and everyone listening takes from this is Gary Gensler. And the SEC tried their hardest to make ETh security in the US for sure. And the reason they failed was because the crypto community organized politically, and we pushed back, got loud and we got loud. And this is major progress because we weren't doing this sort of thing in 2022. It was all SBF was doing, the political donations and playing the DC game. So it's. It's bullish on another level that we have the power. I mean, it's 20% of Americans own crypto. American adults own crypto. We have the power to actually push back and make change. And here's an example of that. So a cool lesson from that perspective.

David
Too, David, in stark contrast. I love that this is happening at once. So we get. We get the freedom of the SEC from the perjury of the SEC, but also what's going live, I think, pretty damn soon here because the ETF's is coming is this awesome ad from bitwise. So just, like, can't stop winning against the SEC, and we're getting these very sick, like, normie targeting ads for the Ethereum ETF. Let's go ahead and watch this ad.

Ryan
I actually haven't watched this, David.

David
Oh, wow. You're going to love it.

Ryan
Hello. I'm Ethereum, big finance. You okay?

David
You look really tired.

Ryan
Just calling it a day. But it's 04:00 p.m. yeah, and I've.

David
Been working nonstop since.

Ryan
Since 930 this morning, so. 930? You don't say.

David
Yep.

Ryan
You'd want a little shuteye, too, if you'd been moving billions around the world. Well, actually, I do. You know, stable coins, nfts, loans. People can access me 24/7 what? But look, everyone's different. You should get your rest. You've had a long day. Well, I have, haven't I?

David
Definitely.

Ryan
You'll get after it tomorrow.

Tomorrow's Saturday.

David
Monday.

Ryan
So get after it again on Monday.

David
Monday.

That is awesome. So good. So good.

Bit wise. Had a very successful bitcoin ETF. Just like, shoulder to shoulder with some of the big boys. Fidelity black blackrock. I mean, Blackrock's dominant fidelity is large, but, like, bit wise, punching above its weight class with the bitcoin ETF, I think they're making a very big push to take an even larger market share because bitwise and ethereum just go, they just go hand in hand like the business model for bitwise, which is just like asset indices, crypto funds. And what ethereum is, is just, I think they're making a very big push because they see Ethereum as like a much larger foot in the door that they have into the traditional world.

Ryan
It's a way to tell the story because I mean, they've been bullish on defi assets as well. Right. And just as the gateway to all of the other tokens and assets too. So well done on that commercial to bitwise. And by the way, folks can mint that. So it looks like I've minted this. 800 people have minted it.

David
I should say base or on Zora? On Zora. On Zora chain using my Coinbase wallet, which hopefully gets me an airdrop of something. Either the Zora something. That's how I'm doing this.

Ryan
You're hoping for May Zora airdrop I could see.

David
Yeah. But I also use the Coinbase wallet to mint on base all the time too.

Ryan
There you go.

All right. We got more coming up, including a vulnerability in Kraken where this was proof.

David
That the crypto industry is like dumber than ever. Not any fault of Kraken whatsoever. This like super lame security auditor certic.

Sorry. We'll talk about this story.

Ryan
Yeah, I can tell you're fired up about it. It's like I have a question as whether these were white hats or black hats or what.

David
It could have been white hats but they chose not to be.

Ryan
Also, there's more Donald Trump in this episode. Can you believe that?

David
Real news.

Ryan
Real news this time is real news. And eclipse this time it's real. All right, before we get to that, I'm going to take off these glasses here, David, and we're going to thank our sponsors including Mantle, who is a layer two that you absolutely should check out and get some yield. Yeah, get some yield.

David
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Follow on Twitter, and explore the ecosystem built for the real world on celo.org quests. And we're back. A Kraken exploit for $3 million and some drama. Okay, so chat GPD summary of this. Kraken experienced a security break when Certik, a cybersecurity firm, exploited a vulnerability allowing them to withdraw $3 million from the exchange. This incident led to a dispute with a Kraken accusing Certik of extortion and certic claiming that they were conducting white hat security research. Uh, the funds have since been returned, but the incident has now raised questions about the ethics and legality of security research in the cryptocurrency space. I don't actually contest that line from chat GPT. Or actually, maybe that was grok. Uh. Cause I actually don't think the only question that has been raised is, like, why the f is doing what they're doing.

Ryan
I actually have a couple of questions. So the first question is, like, how. How did this happen? How? Like, what's the mechanism by which an exchange actually gets hacked for $3 million?

David
Right, right.

So I'm sure there's a bunch of different ways where an exploit can happen. There's not just, like, one hole to breach. There's many that are all patched by all the exchanges. This particular exploit in Kraken, I think, had some mechanism where people could trick Kraken to thinking that they deposited when they actually didn't.

I don't know the details of how it works, but I think it's fair to say, at least for illustrative purposes. Imagine you have the trick of you attach a string, like a fishing wire, you glue it to a coin, and you drop that coin in a vending machine, and then you pull it back out, and you just keep on dropping something. Something like this. And so Kraken is crediting people on the other side without actually receiving the deposits. And so you can mint.

You can mint Kraken BTC, for example. I got it without actually depositing.

Ryan
It's not like they figured out Kraken's BTC.

David
They didn't.

Ryan
So it wasn't a huge deal. It was $3 million. But it was kind of that, like, coin trick that you maybe described something like that. But the way that Certik handled this was absolutely ham fisted and bizarre. Right. Because it seemed like they almost stole the money.

David
Yeah.

Ryan
What happened here?

David
Okay, so first they exploited the exploit that I just described for $4. $4.

Ryan
All right.

David
To prove that the exploit exists, and this activity would have been classified as white hacked activity, because this is what they needed to do to prove the exploit right. And this is like. Like white hat ethics. Like, don't. Don't actually steal money. Just prove into the minimum viable necessary that you need to do that. You can steal it and then disclose it secretly and then disclose it to Kraken, earn the bug bounty, which was going to be six to seven figures, like 200,000, up to a million dollars something, a very large sum of money.

And then they would just get off with the white hat money, which is, like, totally fair and square. We appreciate white hats. Anyone who should totally pay out white hat bug bounties a very celebrated thing in all of security, really.

But instead, what certic instead did after they stole. Stole $4, which I wouldn't count as stealing, just doing bug bounty stuff. They then did that same exploit and then, you know, removed $3 million from Kraken, which is far beyond what anyone needs to do to prove that they are white hat, like, hacking. And so now this is different.

And then they went to Kraken and was like, pay us a larger bounty.

And so, like, a $3 million bounty.

Pay us a $3 million bounty, perhaps, which is, like, verifiably insane thing to do. And then Kraken then starts to interpret this as no longer white hat activity. Instead, they choose to interpret it as theft, and they're criminal and threatens to surtech.

Ryan
This kind of feels like a ransom.

David
It's kind of feels like a ransom.

Ryan
This is the one of the ctos of ledger, I believe, saying exploiting a vulnerability and then returning some funds or negotiating reward is not white hat behavior. Let's not pretend otherwise. So a lot of people in the industry came down strongly against this, including Taylor Monahan. What does she say?

David
I would not want to be on the other side of Taylor Monahan. Taylor Monahan, now of Metamask, formerly my crypto. Definitely, like, a security expert in the space.

Ryan
Not afraid to speak her mind.

David
Not afraid to speak her mind. Right.

Basically, like, I'm just going to skip to the last line. You should hide in shame and be thanking Kraken for not pursuing you criminally and civilly, not bragging about your bullshit on Twitter. Part of the story is that, like, Certik just went onto Twitter and said, like, we've discovered a bug bounty. And Kraken, look, we, like, took $3 million from them, and everyone's like, did you just admit that, like, on Twitter? Why did you do that.

Ryan
Do you have lawyers?

David
Which brings us to the meme that summarizes this whole entire event, which is the classic Gru meme, which is, step one, hack Kraken. Step two, three, steal $3 million in brank sanctions. Part of the way, Ryan, that didn't tell you the story, is that they put it through tornado cash on Polygon, which, like, everyone's like, oh, like, you can't touch Polygon. But you know what I learned this week? That the Polygon tornado cash is not on the us sanctions list. They did not add that.

Ryan
Why is. It's a different.

David
They forgot.

Ryan
Okay. It's still legal to these tornado casts on Polygon.

David
So that's why. No, it is not illegal to use Tornado.

Ryan
Yes, it's still legal because it's a different contract address.

David
Don't want to be putting through Polygon to, like, obfuscate your traces.

Ryan
All right.

David
And then you're. And then. Okay, so, like, that's. That's the second group panel. The third group panel is publicly take credit. And then Gru is, like, looking back at, like, oh, wait, we publicly take credit. Like, this is the same auditing firm that everyone. Everyone has made a farce of it, because all of their audits keep getting exploited by North Korea.

Ryan
Oh, geez. Really?

David
Not a great track record from certain.

Ryan
Okay, well, this is, like, someone got carried away, I would say, in their hacking.

A little bit of ego upplay, though.

Hopefully, they've been properly chastened by the social layers.

David
So they gave the money back to Kraken, and they waved the white flag.

Ryan
Yay.

David
Yay.

Ryan
They could have just gotten the money, though.

David
They could have been, like, a six to seven figure bug bounce. See?

Ryan
Yeah. And.

David
But instead, they are, like, going to lose business. And now, like, I mean, I don't know how they have any businesses left. Maybe that's why.

Ryan
There you go.

Let's talk about Donald J. Trump his second time.

David
Back to Donald J. Trump.

Ryan
Yeah, not his token this time.

David
This is. Okay, this is actually real. Trump has stated this last week that he explicitly wants all remaining bitcoins to be mined in the United States.

Ryan
Play in his own words, because, man, this year, here he goes. Defer to secure America's future, create opportunity for young people. I will end Joe Biden's war on crypto, and we will ensure that the future of crypto and the future of bitcoin will be made in America. We're going to keep it right here, and a lot of it's going to be done right here. In Florida, right?

It's so weird to hear cheers from that, isn't it?

Bitcoin, made in America. Bitcoin, made in America.

David
Just stamp it. American mind. Bitcoin, let's fucking go.

Ryan
But Joe Biden's war on crypto, did you hear that? That's quite the soundbite.

I wonder, I wonder if Democrats are hearing that. I wonder if the Joe Biden campaign is hearing that loud and clear.

David
Yeah.

Later posted on Truth Social, which is like Donald Trump's version of Twitter. Uh, he wants bitcoin. This is where he said, I want bitcoin to be made in the USA. It will help us be energy dominant, which is like big bitcoiner talking points. So you know, he's like winning every single, like single issue bitcoin voter, if not crypto voter. Wow.

Ryan
Well, crypto is definitely an election. Uh, I mean, people said it would happen. I kind of thought it would happen, but I didn't think it would happen in such a, um, like big way and now.

David
Super big way. Two new different types of real world assets being tokenized on chain. I want to talk about three DNS, which is tokenizing web two. I can domain names on optimism.

So pretty cool, kind of self explanatory with three DNS. They just register web two domains as nfts on optimism.

Ryan
That's like dot coms. If you're not familiar with icann, dot coms, dot nets.org, dot ed uses all of that stuff.

David
Yeah. And so they're starting with box and a few other icann domains and then they're just going to expand from there. But they have this pretty cool partnership with just the ICANN registry to compliantly, legally in a partnership, tokenize these ICANN domains into an NFT. So trading an NFT is legitimate trading of ownership. So even though that's a digital asset, it's a real world digital asset that is coming and being tokenized on optimism.

Ryan
That's, we could tokenize bankless.com and sell it, David, wanna do that?

David
I don't wanna sell it, but I do wanna tokenize it. Okay, well, cause like Makerdao might actually give us a loan on that, which is kinda cool.

Ryan
Take our loan out and we get, yeah, we get liquidated on that loan and there goes the website. Sorry guys, that's how it works.

David
Okay. On second thoughts, we will do something else, but in theory we could. This is the future. And that's for the first of two real world assets being tokenized. Tether also has announced tethered assets starting with this platform called alloy, and they want to tokenize gold. We've actually seen tokenized gold before. It's not the first time, but it's definitely different when tether does it. But you can also kind of just like, understand that, like, tether's not ending at gold. Maybe they tokenize further commodities. Maybe they just put a lot of commodities on chain. Extremely oilish. Tokenized oil, like, I don't know, copper? Uranium. Uranium on chain would be like kind of wheat.

Ryan
You would buy some uranium on chain, would you?

David
Yeah. Well, because, like, uranium is going to catch a bid because of, like, AI power demands.

Ryan
I used to own some gold on chain. You remember digix?

David
Digix? That was the one. That was the one, yeah.

Ryan
And then I was like, you know what? I'd rather not. I'd rather own gold than gold.

David
This is. This is how I ended up capitulating on, like, owning bitcoin, because anytime I owned bitcoin, I'd be like, but I could own more ether. And so I stopped buying bitcoin because I would keep on losing it.

Ryan
Yeah, you keep losing. You lost your bitcoin to eat because.

David
I kept on stealing it.

Ryan
Oh, yeah.

David
I can't hold on to my bitcoin. It turns into ether all the time.

Ryan
I thought you're confessing the loss of some private keys, in which case, David, I got to get you off some multi sigs there, because that's worrying me. David, there's an event happening that you're going to that I won't be at, but that bank listens to at ETH CC next conference. What's happening here?

David
ETH is coming up starting Monday, July 8, for the second week of July, for all of the people that are being in Brussels is typically in Paris every single year. But this year it's in Brussels because of the Olympics, is in Paris. And so when the Ethereum ECC community conference goes head to head with the Olympics, we lose. We don't win that one one year, sadly, but not this year. So we're in Brussels. So Monday, July 8, from 04:00 p.m. to 07:00 p.m. brussels time, Ces time. If you are a bankless citizen and you're going to ECC, you're invited to come get drinks with me.

Rachel, Alex, Christy, Nick, all the other, the bankless team, other podcast listeners, podcast guests, team members, sponsors. Just going to drink.

Ryan
Martin.

David
Martin sprelly will not be there if he does be there. Does he will? I will not let him in.

Ryan
You don't know that.

David
If he's a citizen, do I have to let him in? Yeah, no, I'll just cancel a citizenship. I'll just do that.

Ryan
Wow. Revocable.

David
So, yeah, so definitely come. There is a link inside of the bankless discord. There's a link in the show notes, but you can only sign up if your email is a paid citizen because that is how we do things. Can't invite everyone, David.

Ryan
We got some unfinished business. So while I was out last week, I was informed that the results of.

David
The EtH pitch, our beta use of joke race.

Ryan
Yeah, yeah, yeah, the EtH pitch. Let's say we both gave our best ETH pitches. Yours was absolutely fantastic, I gotta say. And then I did mine, and then the bankless community decided. And the stakes here were quite high because there's some rumor, I haven't seen it yet, because the. The mentor of this NFT has been a little slow to minted, has been very busy, super busy with all sorts of other things. But that is going to be a trophy, a bragging rights trophy. NFT, right.

David
And just to commemorate the successful beta run of bankless using drip race, what.

Ryan
I'm trying to say is the results are in. And I got this one, David.

David
I got this one just by a little bit. You barely got across a lot.

Ryan
Well, yeah, I won't share the results. Then people can go click the joke race link and see what.

David
There's also 72 to 13.

Ryan
Well, you know what?

David
Okay, so just for context, like Ryan said, we engage in a competition who could give the best pitch for the ETTF. Then we had bankless citizens vote on who gave the best pitch. So if you have an ethereum address that has a Po appless po app, from 2022 or onwards, you are unable to vote. We got 85 votes. Ryan won by a little bit. Good for him. It's cute. But this was just like, actually just like us learning how to use joke race and work with our community because we're doing this again. This time it's different. So we're doing another vote for bankless citizens. But this time the thing being voted on is a podcast.

This is first ever bankless listener Bankless citizen nominated podcast. So this one's a little bit different than the winner.

Ryan
You will do the podcast. Whatever wins.

David
We do the podcast. Yes. There's two phases here, so it's one step more complex, but I think we can handle it. There is a entry phase. So by the time this episode goes out, this will be live. Bankless citizens can propose a podcast. A podcast episode. You can either propose a topic, and Ryan and I will talk about it. You can propose a guest, and Ryan and I will invite them. And then that goes for one week. So submissions are going for one week, and then after that, there is a one week voting period, which also citizens vote on. So citizens get to submit an idea. Citizens also get to vote on other citizens idea. By the end of the one week voting period, which will be in two weeks from now, we will go do that podcast episode.

Ryan
No matter what. No matter what.

David
No matter what.

Ryan
This is a bankless, governance, reputable commitment to do the guest or do the topic.

David
Don't mess with us, please.

Ryan
Well, these are banks.

David
I do not want to do an episode with Martin's Krelli.

Ryan
I was just thinking that. I was just thinking that if they.

David
Vote for it, then I guess. I guess that's the.

Ryan
I guess Martin's coming on if he wants to.

David
I guess Martin's coming on if he wants to. The guest also has to want to. He can't compare.

Ryan
Yeah, that's true. That's true.

But we'll do our best. No matter who it is.

It should get interesting. This is great power, great responsibility for the bankless community here.

David
Yes.

Ryan
All right, well, we'll see how that goes. David. And I look forward to receiving my NFT. My friend, I got to say, it feels weird to compete against you because we're so collaborative on this, and I just feel kind of.

David
I need to think of another competition.

Ryan
Yes. You got to win it back.

David
I need to win it back.

Ryan
So let's end with some Martin content, shall we, David? This is the meme of the week, the ballad of Donald J. Trump. What are we looking at here?

David
We are looking at the Scooby Doo format.

Who is that character? I don't know who that character is. Scooby Doo character. The main frat boy looking Scooby Doo guy with handkerchief necktie is. He has got the victim, he's got the perpetrator, and he's pulling off the Donald Trump mask, and it's very pale, ghosty looking.

Ryan
Martin.

Martin.

David
Internet's most hated man.

Ryan
Hopefully, this is the last week we'll have to talk about DGT coin, but who knows?

David
This is.

That's our choice.

Ryan
That's our choice, I guess. All right. Gotta end with this. Of course, you know, crypto is risky. You could lose what you put in. But we are headed west. This is the frontier. It is not for everyone. But we're glad you're with us. On the bankless journey. Thanks a.

ROLLUP: ETH Beats SEC! | Trump Coin? | LayerZero Token | ETH ETF Trading Soon

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1. Ethereum's Legal Victory

2. Trump Coin Controversy

3. LayerZero Token Drop

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