ROLLUP: ETH ETF Approved | Crypto Politics | Uniswap Wells Notice

Ryan Sean Adams
Bankless nation. It is the fourth week of May in the year of our Lord 2024, and this is an absolutely historic week on the bankless weekly roll up. I think this might be one of the winningest weeks that I've ever seen in crypto. Yeah. Yeah.

I'm trying to think of another week that stands out in the way that this week stands out. And I would definitely say it's the most winning week we've had politically, maybe the most winning week in America since I've been in crypto. Maybe the most winning week ever. I think it's the most winning week ever because, like, we're not just talking about the ETH ETF, but we're talking about an entire political 180, about its stance towards the entire industry. And that is showing up, like, first and foremost in the price of ETH because of the ETH ETF.

David Hoffman
But this impacts the entire industry. I gotta tell you, man, it feels real good. Feels good. After the real good. Two years we've had.

Ryan Sean Adams
Two and a half years we've had. Of all of the politics bullshit. Yeah, yeah. Like, just like pressing down against us and the us government to actually clock in some wins. One thing we should say before we get into this roll up.

Okay, so for. For bank listen listeners, you guys have an advantage of living in a future world where you actually know the outcome of the Ethereum ETF approval or denial. And if it was somehow denied, this is agency so poorly. So the way David and I record weekly rollups is we record them the day before. So right now it's like we should clock in our time.

It's a Thursday, May 23, at 1240 eastern time. Eastern time. Okay. And as of now, we don't know for sure whether the Ethereum ETF will be approved or not. Remember, the deadline is today.

The deadline is Thursday the 23rd. At the time that we're. So we don't know as we're jumping into this, you know, but we don't know. And I think, David, we just gotta, for the sake of this episode, we just gotta assume approval and maybe just tell the story of this 1180 where it seems like the odds of approval are approaching certainty here. One thing I'll also say is if it is approved, there's another episode already waiting for you, one that we shank.

David Hoffman
Faster than this one. Yeah, yeah. And it's probably the episode, hopefully, where we're celebrating the approval of the Ethereum ETF. So go. Go check out your podcast feed, get that or on YouTube or wherever you listen.

But nonetheless, other things also happened in crypto. So in addition to the ETH ETF approval that we are probably going to talk about how the approval swung in our favor at the 11th hour, there's also the political changing winds in our favor as well. And then also a bunch of airdrops, perhaps on the back of just like, being extremely bullish ETH edition. Big, big airdrops coming out this week that are being teased by the protocols themselves. Meanwhile, we learn about what was inside the Uniswap wells notice.

And then also bankless unleashes phase two of our on chain collectibles. So all of this and more coming up in the weekly roll up. But first, a message from our friends and sponsors over at Transporter. Transporter is a brand new consumer bridging app powered by Chainlink's CCIP. Uh, we did a Twitter spaces with a chainlink God and fishy catfish.

Ryan Sean Adams
Really good. Really good. They're just, they're so smart. They're so precise in their speech. Uh, really, really useful.

David Hoffman
If you want to learn about, like, how transporter fits into the chainlink ecosystem, definitely go listen to that twitter space. It's on the bankless twitter. You can just scroll down after you scroll down through all the tweets of, like, bankless, talking about how we're winning so hard. Transporter IO. If you want to use this bridging app to go through all out, all the chains, arbitram, avalanche base, bnb, any evm chain.

Really? And then you can bridge all your assets, eth link, USCC and more. Yeah. So all you have to do is go to transporter IO and just send it just like the Eth price this week, I think. Just like the eth price.

Ryan Sean Adams
We got to start with bitcoin, though. Let's. Let's give the king his due. All right. Bitcoin is the number one crypto asset.

So, David, let's look at the Kraken charts and tell us where we are on the week, because bitcoin has a. Not a bad week, a green week. Yeah. Starting 65,800. And then it went up 3% this week to where it is now at 68,000, hit 71,000 at the top.

David Hoffman
But it has come down since hitting 71 on the backs of the ETH. ETF news that it was very likely going to be approved. Bitcoin hit 71,000, came back down to 68,100, where we are now. Anyways, moving on to ETH price, starting starting the week at the low, low price of $2,960. Under three.

We started this week under 3000. Yeah, silly. ETH really pushing new lows on the price at the start of this week. Up 28% on the week. Whoa.

Currently at $3,800, hitting 3900 above 3900 this morning. Definitely some. Some very strong volatility in the ETH price this week. 28%. So bitcoin up, up 3%.

Nice drop. Bitcoin Eth up 28% on the week. David, look at the size of this candle. This was. This happened what, May 20?

Was that the Monday, May 20? Yeah. And we're going to talk later in the episode about the tweet that really started this God candle. And I think we want to get to maybe the size of this God candle in a second. But there's another chart we should look at, which is the good old Ethereum trust.

Ryan Sean Adams
You remember that thing, Ethan? Things about to go away Eth. The grayscale ethy discount was trading at a 24% discount, so you could buy ether at 24% off because people just didn't want to hold the grayscale eth discount by that much. It is now down. That discount has reduced down to 7%.

David Hoffman
So actually they're still, like, from what? From, like, negative. From negative. Negative 24 to negative seven. So they're still in the grayscale EtH trust.

There's still a 7% discount at the time of recording. So you can still, as of this moment, buy ETH 7% as of this moment. But they're going to hear it tomorrow. Like, it's going to be post approval, close right up. Real stale.

We've also just seen some insane volume in the grayscale Ethy trust. You just like three times more volume on a daily basis than we've seen ever before. Did you get in on some of this, David? Did you get in this? In your four hundred one k.

Ryan Sean Adams
And like, do you have any of those retirement accounts or anything? I don't have a 401k. This has been a bleeding goodbye for a very long time. For sure. And we mentioned it a few times, more than a few times on the roll up.

So hopefully some bankless listeners benefited from this ArB opportunity here, which there still is. Which there still is. Yeah, there still is. As of. As a recording.

And we're just assuming this thing gets approved. So let's just reminder, if the ether ETF does get approved, which the grayscale will be one of them, the ETH trust gets converted into an ETF and that premium just zips, poof, gone. And now it trades that par. Yeah. So let's get back to that God candle.

How big was it? I'm going to start with the ETH market cap started the week at $370 billion. It is now $460 billion. So in seven days, Ethereum added $90 billion to its market cap. That is one and one quarters.

David Hoffman
Solana added to the Ethereum market cap in seven days on Monday. This Monday, when we got the news that there was a change of the winds in the political establishment about the ETH approval, Ethereum got its largest candle ever. And I'm not talking about green candle, like candle red or green. The largest candle ever. Yes, a daily candle, 24 hours candle of $595.

That is the most that the ETH price has ever moved in a daily basis. I mean, we set this up in our livestream earlier this week on, I think, Monday where we were talking about this news just came in, but before this. All right, so at the, at the bottom of the candle, ETH was in some pretty negative narrative territory. People are not feeling good about Ethereum, that this bull cycle and a lot of people had not, had priced out the idea that Ethereum ETF was even possible. So this is the market just suddenly realizing, uh oh, we're offsides, we're underweight, we got to get back in.

Yeah, I mean, granted, they knew things changed. Like, there was previous new information, there's new information. So, like, you can debate about whether that means off size or not. There are some ETH stalwarts out there that says, like, this was, this was always a possibility that the market was totally, like, under serving. Yeah.

But yes, nonetheless, there's like, and I still actually think that there's quite a bit of, like, offsizedness in the crypto markets in this. But this is what, another thing is nice about this candle is it's fundamentals. It's very clearly, it's not just like a day of trading or like, you know, something, some whales buying. This is clearly fundamentals. Getting priced in totally ether price is.

Actually still 28% below all time highs. And so there's like, right now, there's a big conversation is like, okay, like, but what will the ETH ETF approval actually do to the ETH price? Will it will underperform in terms of its impact versus bitcoin because there's just not as much demand for the ETH ETF than there was in comparison to bitcoin. Will it overperform versus bitcoin because of the price sensitivity that ether has? And actually, as a tech platform like, asset, there's actually more demand relative to its market cap versus bitcoin.

Right now, that's a conversation that's currently unfolding. Let's talk about that. So all time high was what, 4815 something? 4800 territory. And I'm looking at the Kraken charts here.

Ryan Sean Adams
The last time we hit that was November 2021. I had forgotten that. That was in 2021. So what was it like in Ethereum at that time? What was it like in crypto at that time?

A much different market than the all time high we might hit now. Certainly nothing even close to an ETF. Well, first and foremost, at that moment in time, we had 0% interest rates. In November of 2021, that phase of the market was actually dominated by the Sol Luna Avax trade. November 2021 was Sol Luna Avax territory.

David Hoffman
Luna, of course, would then pop just two months later, three months later, that was really the actual top of the market. I guess this just feels like a much stronger foundation as we're approaching this new all time high than we had in November 2021. So that's an interesting comp for you. Should we talk about the ratio for a minute? Yeah, ratio, start of the week.

Pretty, like, pretty piss poor at, .0458 which is a three year low for the ratio. Yeah. It has now jumped up to 0.055, which is still low. That's still a low number for the ratio. I'm going to guess here, David, that this is the biggest God candle we've seen in the ratio.

Ryan Sean Adams
Like, maybe in history. I don't know. In 2017, the ratio just moves a lot slower. Now, in 2017, there are some bigger movements. I actually kind of think, like, it's.

A good start, I guess. That was such a long time ago, crypto history. But that was when Ethereum was just starting its price discovery ascent, wasn't it? Totally, yeah. Point going from .045 to 0.055 is like Ethereum getting out of the basement and is now back onto, like, level one.

David Hoffman
Uh huh. But, like, we still have. We still have a lot of. A lot of room to grow. There's still there needs in order to get bullish.

Like, I want to see 0.07. Do you want to do the thing where you call the bottom the cycle on the ratio? And you say it was like, over here, it was like last weekish. Yes, exactly. That's exactly what I'll do.

Ryan Sean Adams
David just called the bottom. That's easy. Did you just make me call the bottom? It's such an easy bottom call. I just gave you that.

I lay up for you. You're welcome. Let's talk about the total price and the crypto market cap. Where are we? Yeah.

David Hoffman
$300 billion was added to the crypto markets in the last seven days. Started the week at 2.45 trillion, ending the week at 2.75 trillion. Quite like, I think 90 billion of that reminder was out of ether. But also, many other things are also up. Generally, the market's up.

Ryan Sean Adams
Finally doing its part, though, you know, taking the lead. Yeah, it was lagging some good eth bull fuel out of you guys. We've got some two takes that we want to highlight here, one from Vance Spencer, who says, the ethesis has always been that there is a far lower supply of ETH than the market realizes due to years of burn heath in staking and restaking and ETH locked in Defi and NFTs, and that this supply imbalance will manifest when a demand shock hits a jump in ETH. Demand will be the catalyst to reflexively push the ecosystem into overdrive. More fees, more staking, less heath supply, more flows.

David Hoffman
Uh, we haven't really seen, like, marginal new ETh demand. No, we have since. Since we've got the same crusty holders. In whales, basically, like, like, we have. Not since the merge, since, like, the.

The term ultrasound money is now, like, formerly cringe, but since the invocation evocation of ultrasound money, which was the merge and the burn, we have not seen marginal net new demand for Ethan, a material way. We haven't seen a bull market. Hasn't seen a bull market like that. People don't know what the asset is or what it can do. And this is part of the institutional story, I think that that should this Ethereum ETF get approved, that will be told by Blackrock and fan EC and like, all of the large asset pushers.

Yeah. And this is uncle. Just shout out uncle. You're in this weekly roll of twice. ETH has never seen price discovery with both proof of stake and EIP 1559.

So that's. That's something to look forward to. Very bullish, uncharted territory. This whole section is going to age absolutely, like, poorly if the Ethereum ETF is not approved, David. So we're just going all in on this.

We'll like to. We get to temporarily live in the moment of the simulation right now. Listener, I don't know what your state is, but I'm very happy right now, and so is David. Let's go check out the layer twos over on layer two b. This section brought to you by mantle, which is an l two that we enjoy.

Ryan Sean Adams
David, are we at all time highs in terms of total value locked in layer two s? I think at least tied for it. I haven't seen it higher than this personally. We are a sliver below $45 billion in layer twos. I mean, as soon as ETH goes up by, like, you know, half a percent, that'll, that'll hit $45 billion.

David Hoffman
So congrats to layer two ecosystem. Zooming in on $50 billion locked in layer two's. Activity across layer two's coming in at a healthy 9.5 x scaling factor. That means nine and a half ethereums are being used as true raw, organic, grass fed transactions per second on layer twos base, of course, taking up the lion share, but followed actually very closely by arbitrum. So base and arbitrum neck and neck coming in at 25 transactions per second and not really at capacity.

Those are 25 transactions per second of just like whats going on big a. Price appreciation for all of crypto, for the Ethereum community and outside of it as well. Or Ethereum assets, ecosystem assets, and outside of it as well. David, we're going to get into how the Ethereum ETF turnabout happened in the next section. But before we do give folks a taste, let's go check in on the bitcoin ETF, right?

Yeah. Because there's actually some positive news here, too. Okay, tell me. It's actually pretty nice. So we have been in a doldrums in the last like two months or so.

Because of the equilibrium between outflows and inflows and the bitcoin ETF's, we are actually at ten days in a row of positive flows into the bitcoin ETF's. So what's the day? The 23rd is the day today. Since the 13th, every single day that the markets have been active has seen net inflows into the bitcoin ETF's. We are not yet at all time highs in the total assets under management of all the bitcoin ETF's, but we are really, really close.

So not only are we getting the eth etf, hell yeah. But the bitcoin ETF is resuming to have up only inflows. So good stuff, good stuff. Coming up next, how the hell did the odds of an ETH ETF go from zero to 100, almost 100 inside of two days? A historic story in crypto, and just an absolutely legendary story that I think will go into the halls of crypto history.

Also the story that started with Elizabeth Warren's anti crypto army ends with a full democratic party 180 and how crypto is now being fought over by both us political parties. Starting with SAb 121, we'll pick off where we we'll pick up where we left off last week, the fit 21 bill that was voted on by the House this week, and how it's all heralding a new era for Crypto's position in politics and therefore the world. But first, before we get to these stories, a moment to talk about some of these fantastic sponsors who all had a role in helping develop these stories of the crypto pivot in Capitol Hill. So let's go hear from them right now, starting with Kraken. 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, Krakens 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 theres 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, its really the perfect place to get your complete crypto experience. So check out this simple, secure and powerful way for everyone to trade crypto. Whether youre a complete beginner or a seasoned pro. Go to kraken.com banklists to see what crypto can be.

Not investment advice, crypto trading involves risk of loss. Arbitrum is the leading Ethereum scaling solution that is home to hundreds of decentralized applications. Arbitrum technology allows you to interact with Ethereum at scale with low fees and faster transactions. Arbitrum has the leading defi ecosystem, strong infrastructure options, flourishing NFTs and is quickly becoming the web three gaming hub. Explore the ecosystem at Portal Arbitrum IO are you looking to permissionlessly launch your own Arbitrum orbit chain?

Arbitrum orbit allows anyone to utilize Arbitrum's secure scaling technology to build your own orbit chain, giving you access to interoperable, customizable permissions with dedicated throughput. Whether you are a developer, an enterprise, or a user, arbitrum orbit lets you take your project to new heights. All of these technologies leverage the security and decentralization of Ethereum experience web three development the way it was always meant to be. Secure, fast, cheap and friction free. Visit Arbitrum IO and get your journey started in one of the largest ethereum communities.

Launching a token worried about the IR's? Talk to Toku for five minutes to learn how to save hundreds of thousands of dollars for you, your team and your investors. Now, if you do an initial consultation, Toku will cover the cost of your token valuation, which is what you need for your launch. So don't wait. Reach out to the team right now@teamoku.com.

dot that's Team Dash u.com. All right, this is it. How did the odds of an ethereum ETF suddenly swing in our approval? It was, like near zero. This is what analysts thought last week, and now it is near certainty.

Ryan Sean Adams
I think in order to tell this story, we have to pick up where we left off. So where did we leave off with political momentum in DC, I think is an important part of the story. Yeah. So covering this on the weekly roll up last week, we were talking about SaB 121, which was a very toxic SEC rule towards crypto that basically was considered a backdoor ban because it, it really just made custody in crypto assets extremely capital efficient. Just treated crypto not like any other asset, basically, just like invalidating the feasibility for bank Cody, for trad companies to custody crypto.

David Hoffman
Uh, this bill to repeal SAb 121, which was an SEC rule, this bill to repeal it was voted on in the Senate, and we got a final vote of 68 to 30 in order to repeal the vote. Now, Biden, the Biden administration has said that if the vote went this way, that there was indeed a vote to repeal, that Biden would then go and veto it. But the surprising thing is how many Democrats in the Senate defected from Biden's, uh, stated, uh, from party line, saying that he's going to veto the bill. Well, the Democrats, Democrats, a good chunk of them, more than what the Democrats should be comfortable with, just didn't care about Biden's statement and voted to repeal it nonetheless. So that that bill, Sab 121, is going to Biden's desk.

He has to either sign it, which will repeal it, or veto it by Monday. But the point is, is that the Democrats in the democratic party have expressed alignment with the crypto industry and disagreement with Biden's stance towards crypto. That's where we left off. So we talked about this in last week's roll up, but analysts really hadn't brought this political analysis into the odds of an ethereum ETF approval. And why not?

Ryan Sean Adams
It's because it's basically a week before the deadline for approval, and they're not seeing anything. They're not seeing anything from the SEC. They're not seeing updated filings. So basically, the odds of approval felt like on Friday, last Friday were like. 0%, but the market had it at 7%.

Yes, but, David, you and I talked about the potential in the roll up last week. Can we do it? Can we play the clip? This was all you, bro. This is one of the best Ryan, Sean, Adam calls I have ever heard.

David Hoffman
And I think you had to be a little bit, like, muted about it, but I think you actually kind of, like, really wanted to believe this more than you were willing to let on. Let's go, let's go. Pull out this clip from last week's weekly roll up where Ryan laid out this exact scenario. Let me give you two tail outcomes that could happen, okay. Tail, I guess, positive and a tail negative.

Ryan Sean Adams
All right? So the tail event on the good side would be approval. All right? And this is not very likely to happen. I definitely give it under, like, 5% odds.

But there is a chance here, David. And here's what I think it is. If, and this is a big if, Biden and the Democrats wake up 11th hour, they realize that their party is getting painted as the anti crypto party, and this becomes a. Wins them zero votes, wins them zero votes. They only lose votes, they only lose money.

And Trump. Trump steps in and tries to make this a web wedge issue. If they want to counteract that, they might actually put some political pressure on the SEC and Gensler to just throw a bone to crypto just to prove the ETF. Okay. Just, like, call off Gensler.

Hey, you can let this one slide. If you don't, it'll hurt us come November is not worth. David, that is exactly what I think happened. That's exactly what happened to a tee. Well done, sir.

Well done, man. Well, my co host. Yeah, yeah. Sometimes you get it right. Sometimes.

Sometimes you nail it. But it's just kind of the political tea leaves, I guess. So here's the tweet that really sent this candle that we were talking about in the market section earlier. While this happens, this is now this week. This is Monday of this week.

Okay, now we're fast forward to Monday of this week. It was at 320, so it was the afternoon, 320 eastern, end of the day Monday. Okay, so what are we looking at here? The tweet. Eric Balachunis, who's one of the two ETF commentators out of Bloomberg.

David Hoffman
They're just ETF experts, have risen to fame since the incoming bitcoin ETF. He goes, update. James Safer and I are increasing our odds of a spot ether ETF approval up to 75%, up from 25%. Hearing chatter this afternoon that the SEC could be doing a 180 on this increasingly political issue. So now everyone is scrambling.

Like us. Everyone else assumed they'd be denied. See Nate's tweets below for probably order of events. But again, we're capping at 75% until we see more, for example, filing updates. And so I have a notification turned on for Eric for exactly tweets like this.

And we were in a meeting, we had our podcast scheduling meeting or something, and I was reading this tweet and I looked at it and I read it twice and I'm like, this is amazing. That's amazing. This is a prank. And I read it three times. Yeah, I saw you in that meeting.

Ryan Sean Adams
I saw in the one corner of Zoom, I saw a big smile on your face. Suddenly. Yeah, I think I just said, guys, everyone stop. And we just stopped the meeting. And then we told our podcast, seemed like we have to go live right now.

David Hoffman
And that's exactly what we did. It's so crazy. I know they were saying 25%, but they are actually saying basically approaching zero. They were saying that dispel all hopium. We're going into the next week.

Ryan Sean Adams
It's 11th hour. There's no doctor updates. It's just not going to happen. We got that good tail event that actually happened. Here it is.

Ether ETF filing process sees abrupt progress. So suddenly everybody's updating their paperwork. At the end of Eric Balatronis's tweet, he says we are capping our odds at 75% until we hear, hear more. For example, something that we would need to see in order to have a higher than 75% is filing updates. The next thing that happened, filing updates.

That was like later in the week, right? That was like Tuesday and Wednesday. All of these filing updates pouring in. So what happened behind the scenes, apparently, is the SEC had a change of heart. Who knows why?

David Hoffman
Who knows who called Gary Gensler? But all of a sudden, the SEC is phoning up the issuers of ethereum, ETF's Blackrock fidelity, Bitwise, Vanek, Galaxy 21 reals. And they said, okay, we're giving you guys comments and we need you guys to update your 19 B four s, which is basically an ETF filing by tomorrow, Tuesday at 10:30 a.m. or something like this. And like why they that why they needed them to update their filing is because they needed everyone to remove this staking element out of the ETF's.

So now this is now the final form of the 19 B four s. The ETF filings from all these companies is a what is seemingly being an about to be approved ETh without staking. Absolutely amazing. And one thing I'll say, so I'll give another prediction because we haven't seen the approval actually happen, but I'm betting, and I said this last week, I'm betting Gensler comes out and is like, this has always been the plan. He's like, of course we did this the last week.

Ryan Sean Adams
We just need the doctor starting Monday. People were saying they're just being really quiet about the ETH because they don't want the same shenanigans what happened last night. Yeah, that's what he's going to say. I was protecting investors. We didn't want the same thing to happen, so we had to wait until Monday to start.

David Hoffman
We didn't want the cointelegraph intern market manipulating stuff again. Whatever, whatever Gensler says, at least he's going to approve it. Ok. And if you don't believe us that there's some political pressure, I mean, look at this letter. What I call political pressure, Dave, this.

Is a political pressure inside of a document. Yeah. Bipartisan group, House of lawmakers from, from Congress. So this is led by Majority Whip Tom Emmer and also some Democrats. That is basically to address to Gary Gensler and the SEC saying you guys should approve the ETF.

Ryan Sean Adams
I was just, please approve the ETF. Yep. This was sent this morning, Thursday morning, the day of the ETF approval. Uh, interestingly, it says the letter is urging the SEC to approve spot ether, ETF's and other digital assets because it offers investors crypto access in regulated, transparent and safe formats, highlighting other digital assets. So not just, not just ether, they're saying like, hey, like, be warmer to crypto.

Yeah. If it's possible for bitcoin and ethereum to cross the gauntlet towards a decentralized network, then it should totally be possible for other assets to do that as well. And those should, in the fullness of time, have ETF's as well. This is a trad media commentator, I think, from like Fox Business or something. This is his take.

If the SEC does approve the ETH, spot ETF, it will be one of the biggest regulatory one eighties in recent SEC history and proof that the crypto crowd is a legitimate voting bloc securities lawyers tell me that's what he said. I think that's exactly what it is. And Trad media is reporting it as such too. On the flip side of the debate, Nate Jurassic, Jurassic, he is still in the side of the camp where actually politics really didn't have that big of a deal. Here he put out a theory that the SEC was always going to wait until the last minute to engage with exchanges and issuers.

David Hoffman
And so this was a theory beforehand. This remains to be a theory for some people. So it's worth noting that not everyone is convinced by the political theory. I'm definitely convinced it was definitely political. But there's plenty, there's plenty of data points to suggest that it was highly political.

Ryan Sean Adams
We should know. Just, just because the Ethereum ETF is approved doesn't mean you can immediately buy it like next day. Right? And this happened with bitcoin, although with bitcoin is approved, and there's just like a few days before these ETF's came to market. With Ethereum it could be longer.

So James safer to saying it could be weeks to months before we see s one approvals and thus an ETh ETF. So there's still another box to check here, still some more paperwork to file, which is these s one approvals. So even if Gensler and Sec say, yeah, you can have an Ethereum ETF, doesn't mean we go to market immediately. So that'll be another piece of the story. And this is different from how the bitcoin ETF went to market.

David Hoffman
The bitcoin ETF got approved and then was trading the next day. Yeah. So Eric or James is saying it could be like two to, you know, six weeks before we actually get a live Ethereum ETF. Does that matter? No, I don't think that's for the narrative.

Ryan Sean Adams
I mean, I mean, because it does so much. I mean, we'll put out an Ethereum ETF specific episode talking about the aftermath of this. But just clarifying that ether is not a security does so much to just unblock institution investment involvement in not only ethereum ecosystem, but all of crypto. It's actually one of the biggest events that has ever happened, I think, in this industry. And it also gives people two to six more weeks or like front run Blackrock and all these other people, and allows the market to consider how incredibly.

Offsides it is chasing up beyond all time highs. By the way, there's a side thing that happened. We pay attention. This so controversial blockchain firm, Prometheum launches the long awaited Ethereum custody. They did this on Monday as well.

So this is Promethium. People have called this like a government plant or something because it seems ultra weird. It's this SEC sanctioned exchange that keeps telling everyone they can custody eth. And ether is a security in the bounds of their exchange. It's such a bizarre story.

David Hoffman
They claim to be the only compliant custodian of ETH because they have a license from the SEC to custody eth, which is a security, according to them. By the way, Dave, it's not just us with a tinfoil hat on this. This seems like a sec or government plant of some type. There's actually, Congress is looking into it. They find it weird as well.

Ryan Sean Adams
But what I found particularly funny was the timing of this. So this happened Monday. And the CEO's name. This is the CEO, Aaron Kaplan. He was wheeled in front of Congress before just basically saying, yeah, it's very easy to come in and register for exchanges.

Just look at what we're doing. We did it. Right. And so very interesting that this launch of Ethereum custody service for Prometheum just so happened to happen this week. Right?

A week. I think that Kaplan and Prometheum were expecting the sEc to deny the Ethereum ETF. And wouldn't that be because that's probably. What the SEC told them. Yeah, we're going to deny the ECTF and then you guys are going to be good to go.

Yeah. So here's why I think this is funny. This is a service that no one's wants, that no one's going to use. It was brought to market. So Gensler has a pet example for Congress to show people that have come in and registered and kind of like done it, the law abiding the right way.

And now Gensler is going to completely throw this company under the bus and abandon them by approving the Ethereum ETF. So chef's kiss. It's actually hilarious how this all turned out. Again, some of that spectacular Gensler just. Like leaving his sock puppet out to drop.

Just connect the dots, man. Just connect the dots here. And this is a plus one to the fact that this was political and not a plan of the SEC to always approve it in the last moment, because this, this was also a part of their plan, if you believe the conspiracy, which I totally do. Yeah. All right.

That's approval. That's not only, that's not the only big thing that we expect to happen this week. Here's something we have concrete in our world, in our universe, in our timeline. David, we have concrete proof for a major crypto legislative event. The House passed the fit 21 bill.

What is this? What are we looking at in this tweet? Fit 21, otherwise known as the Financial Innovation and Technology for the 21st Century act, was voted on by the House and approved by the House pretty overwhelmingly. 279 yays to 136 nays, including 71 Democrats who voted Yay versus 133 Democrats who voted nay. Of course, 208 Republicans voted yay.

David Hoffman
Three Republicans voted nay, like 71 Democrats to 33. 133 who voted no. Like that. Any amount of fracturing in the democratic party with the Donald Trump versus Biden election being so narrow, so razor thin, any amount of defection is untenable for Biden. And so this is, this is the thing that the crypto industry is celebrating right now, is basically what we are seeing is a divided democratic party and a in line republican party that's pro crypto.

And so any amount of division on the democratic party, what we are seeing is that is pulling the whole rest of the democratic party and saying, like, do you guys really want to be anti crypto? Like, is that really the hill you're going to die on? This was another acid test. So we had sab 121 last week, right? And now we have this, which is basically, are you pro crypto or you're anti crypto?

Ryan Sean Adams
And 71 Democrats in the House said they wanted to be on the side of pro crypto, which is incredible. I think even analysts are plugged into this like their hopes and dreams were around 50 or so, and we got 71. So this is like the biggest marker I've seen of the tide changing in DC and the wind's blowing in crypto's favor. David, we should just talk about the high level of what the fit 21 act actually is. So what is this thing?

David Hoffman
Ok. It is a bill that is being proposed by chairman Patrick McHenry, which we had on the podcast, and he explained it just directly to us. So that podcast is in your podcast player. But just as a quick summary, there's a few key areas and provisions here it delineates for the crypto industry when the SEC or the CFTC has jurisdiction. So clarity.

It offers consumer protections around transparency and disclosures for promoters and endorsers. It prohibits agencies from preventing from using crypto. It asks the treasury to study stable coins. And it also, I think, very importantly, gives crypto startups a path to become a commodity while also not violating securities laws in the process. There's this trap that the Gensler SEC administration has, which is we really want a lot of our protocols to fall in the fullness of vision of all of these protocols that are airdropping tokens, we want them to become as commodity, like as bitcoin path, but decentralized.

Ryan Sean Adams
Right. But being a security, registering as a security totally nukes the ability for those teams to distribute tokens to the public because it's a security. So it's a self terminating path that Gary Gensler is like, there's totally clarity, just come in and register. But it completely nukes the whole vision. Be like Promethean.

David Hoffman
Yeah, Promethean, yeah. So it gives crypto startups the path to legitimately become a commodity. It's the biggest pro crypto legislation that we've ever seen Congress contemplate. I would say it's not perfect, though. There's some not ideal parts.

Ryan Sean Adams
Right. So this is archival from electric capital saying one of the bad parts is the SEC has to review applications and respond in 90 days. Right. So there's some. Still some agency gatekeeping.

And if the SEC determines an asset operates without a controlling entity, the asset is a commodity and the CFTC has jurisdiction. That's good. But still, leaving the SEC as a determiner of this. And so there's some, you know, agency bias that could be at play. And so I think for people that are skeptical of the SEC, like us, of course, this is not ideal, but still having clear rules is definitely a big step forward.

And a lot of this might get dealt with in the. In the Senate. There's going to be a different type of a bill. There's going to be an opportunity for a lot of revisions. So we'll talk about that a little bit later.

But the big news here is the political change in DC, and that is even affecting the White House. What are we looking at here, David? This is a statement of administration policy out of the Biden administration, who says the administration imposes the passes of this bill, which would affect the regulatory structure for digital assets in the United States, but nonetheless would not veto it if it came across his desk, which is the important thing. I think it's safe to say that's the most pro crypto statement ever coming out of the White House, at least in the Biden tenure. So interesting, David, Nancy Pelosi was also in favor of this.

This is a statement from Nancy Pelosi. People are joking that, like, well, Nancy Pelosi, the greatest trader on planet Earth, she already, if she is pro this, she's probably already bought our bags and she's going to continue to, like, be. Pro crypto, big Pelosi, Ethan vibes here. She's probably got some of those. Fit 21, she said, is a first step to establish a regulatory framework for digital assets, and it must be improving by working with the Senate and the administration.

So she's. She's pro crypto. There was tons of anti crypto sentiment. We'll say that from the usual suspects. Okay, so let's play this clip.

Cause it's too good not to play. Oh, God, this is so cringe. Brad Sherman here. But the long term objective of the crypto billionaire bros. Is to create a new currency.

And they've named it. Well, cryptocurrency literally means hidden money.

Cryptocurrency literally means hidden money. David, how did you make that up? I don't know. What is he even talking about? I don't know what this guy.

David Hoffman
You can kind of see what he's saying. Like, cryptography can help scary privacy, but, like, there's no way he actually yet. No, he just read. He just read something. This tweet is absolutely legendary as well.

Ryan Sean Adams
This might be go down in history. It's definitely the most ratioed tweet I've ever seen. The most hated tweet maybe on the Internet. Certainly in crypto. What are we looking at?

David Hoffman
So this is FSC Dem's Twitter account. United States House Committee on Financial Services is asking the question, who benefits from the passage of the Fit 21 purpose Act, a green check mark in front of wealthy crypto firms that have chosen not to register with the SEC or otherwise comply with the securities laws. And then who stands to lose? Red X. Ordinary investors trying to build wealth, which is a really hot take.

Like Ryan said, there, there are 91 likes on this tweet, which is not, not large. There are 1100 comments on this tweet, and I'll go ahead and read some of them aloud because they're all pretty hilarious. An NFT PFP. Anon says, as a perfectly ordinary person who is trying to build wealth, y'all can't be more in the wrong here. It blows my mind that I'll have to vote.

Read this election, you and only you will be responsible for losing the White House. Chris Berninski, he replies to this tweet as well and says, oh, gaslighting ordinary investors again, huh? Eric Voorhees, who also responds to the same tweet, says, the only investors that have built wealth substantially above inflation over the last decade have been crypto investors. Meanwhile, the dollar decays into oblivion. And then Ryan, John Adams, my co host here, he says, you guys still trying to win elections or.

Nah, you can just, like, scroll down on this tweet. It's like, it's worth it. It's pretty funny. It's basically a who's who in crypto. You have, like, laser eyed maxis dunking on this tweet.

You have Sol bros dunking on this tweet. You have the ethereum community dunking on this tweet. It's just a great snapshot of just like, everyone in crypto, everyone's perspective, too. Like, I think the anti crypto army accidentally unified all of crypto. And I've never seen crypto so unified as over, over these policy issues.

Ryan Sean Adams
It's a really, really cool time. Of course, our friend Gary Gensler was dead set against the Fit 21 act. He published a statement here the morning that the debate in the vote for fit 21 was going. He says fit would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts. Again with this line, David, putting investors in capital markets at immeasurable risk.

That's what would happen if it was approved. So Gensler against it. But Gensler doesn't get his way. Okay, so, um, Congress. Congress voted approval.

And let's talk about what this means. I think, firstly, this is a major political win for crypto. It just signifies that we're getting better. We're leveling up on crypt, on. On politics.

Remember two years ago, it seemed like the only person really making headway, making gains in DC was Sam Bankman freed. Right. How terrible that was. Um, this is Ryan Selkus tweet about that. SBF almost destroyed us in DC by acting alone.

It took a large, loud, open, multiplayer, loosely coordinated, grassroots, deep pocketed band of misfits to brute force this result, a past house bill. Congrats, crypto. You're now a major american political force. I really feel like that's true. So many of us acting, it was like bankless celkist from Masari.

It was like, you know, crypto lobbyists, all of that. It was politicians. It was like a group effort. Okay, right. And tip of the hat to specifically crypto lawyers, who I think are just some of the most chad people that I know in this industry.

David Hoffman
They're just great people. Yeah, totally, totally agree. I think one caveat of all of this is because, again, go back to the Fitbit isn't perfect, ok? And the way Salk has frames this, which I think is right, is we made political progress. Political progress is not equal to policy progress.

Ryan Sean Adams
Ok? So the political progress we made is now crypto is on the register of every politician in DC. They know that we are a faction that votes, a faction that funds parties, a faction that shows up politically in the. We've never had before. Exactly.

But we still need to make some progress in the policy. And the fit 21 bill isn't perfect, but there's opportunity for that one. I think we'll get better at crafting policy and pushing that forward and educating lawmakers. But the fit 21 bill goes to Senate next, and it probably won't be approved in Senate, I'm hearing. And should we be sad about that?

David Hoffman
I thought we wanted the fit 21 bill. Not really. I am personally not sad about this because it requires some revisions, honestly. So because this is a political win, not a policy win. The fit 21 bill, policy wise, not the greatest grade.

That's actually not why we're celebrating. We're celebrating because it was a political win shown by the amount of defecting Democrats in the House. Correct. And now it has an opportunity to be revised, basically. So the Senate, what they'll have to do, and they haven't done this yet, is a Senate champion has to pick it up and create a companion bill for this.

Ryan Sean Adams
And right now, no one has stepped up to lead the charge. So hopefully that happens, but that's not going to happen anytime soon. So this is not like the SAB 121 where went to the House, and there's a timeline where the Senate has to vote for it. Okay. It's just in the Senate's queue.

They can sit on this forever, or they can come up with a companion bill that has some, like, more crypto favorable policy refinements. And I'm hopeful they do that. Zooming all the way out. We started the 2023 year talking about this idea of choke point two point zero. And this was during just like, the absolute depth of the oppression of the crypto industry by the establishment, by the banking sector, by the.

David Hoffman
By the Biden administration, the democratic establishment. Choke .2.0 was this effort to debank crypto and basically invalidate it as an industry by suppressing it through the banking means. And so this is really when the fight against Gary Gensler was really starting to heat up. This was when, during the Silicon Valley banking crisis, many of the very crypto friendly banks that banked many of these startups and paid the payrolls of many crypto startups, uh, was being targeted by, uh, the Department of the treasury and Fincen. FDIC as well.

FDIC, yeah, exactly. Uh, and so a main leader, a main player in the coordination of choke .2.0 is FDIC chair Marty Groomberg, who is actually resigning for completely unrelated reasons, for the political reasons that we've talked about, it just happens so coincidentally to happen this week. Uh, but one of the main players of our, uh, Chokepoint 2.0 is resigning, and that is the head of FDIC. There's some other players here who are worth noting. Uh, Gary Gensler, of course.

Main, main story, main character here. Elizabeth Warren, another main character here. And while Marty Grumberg, he's formally off of the board, he's. That chess piece is being removed. Gary Gensler just got nerfed this week.

Elizabeth Warren just got nerfed this week. And so there are, like, there's a huge weakening in the whole entire concept of choke. .2.0 so, like, I think if there's ever a week where choke .2.0 formally died, it was this week. The anti crypto army is in full retreat for sure. And this is, like, more of that should note with, with Marty, is he was actually forced to resign because there was, like, some scandals and workplace harassment.

Ryan Sean Adams
Right. Like a toxic culture, all of these things. So unrelated to crypto, but still worth celebrating. We'll take the dub. We'll take that.

David Hoffman
He should be out. He should be out of office either way. Yeah. All right, well, so let's, let's, let's, let's summarize all this. And I think Mike Novogratz actually did a fantastic job of summarizing this on CNBC.

Ryan Sean Adams
Let's just play the clip. And I think the democratic regime woke up and saying, this is crazy. Right? There are more crypto owners in America than there are dog owners. Right?

Mike Novogratz
We have 85 million people that own crypto. A lot of them are single issue voters. And the Democrats looked like they were the party against dogs. So you're speculating that a phone call was made from the White House to Gary Gensler's office. And Gary Gensler, who has, for the most part, as you know, been relatively opposed to these instruments.

In fact, he was opposed to the Bitcoin ETF until a court told him otherwise. You think he's going to do it, quote, unquote voluntarily, or maybe pseudo voluntarily, if, in fact, the president. I am sensing a widest shift amongst Democrats that don't want to let crypto be a big election issue. Right. The crypto super pacs have raised over $150 million, and they've targeted Sherrod Brown and John Tester.

You know, elections that matter, matter dearly to Democrats. In swing states, in vulnerable Senate seats, crypto should be bipartisan. And quite frankly, for our industry to do well, it needs to be bipartisan. And it has been really Elizabeth Warren and a small group of people that. Has kind of, I think he's exactly right, David.

Ryan Sean Adams
That is exactly what happened. Maybe just a final, put a summary on this historic week that we've had in this political windshield. You've got a short story that you want to tell. So tell your short story, David. I do have a short story.

David Hoffman
So this goes all the way back to March 29, 2023. Does that date ring a bell for you for any reason, Ryan? No, not really. What happened that date? That date was the day that Elizabeth Warren tweeted out her infamous graphic of Elizabeth Warren is building a anti crypto army.

And this triggered just an insane uproar in the crypto industry. Just this picture alone, it's just like Elizabeth Warren, visionary, looking into the distance, trying to save America through this. A stoic leader building an anti crypto army. And we were all like, I think, very confused in the crypto industry. Like, who is this message for?

Yeah, it's like her base of Massachusetts. Just like, clapping is like, well done, Elizabeth. Go build that ancient crypto armor. Or the economy or we really just. Want crypto to go away.

Like who, like we were all asking, who is the marginal anti crypto voter out there? And like, what is she benefiting from this? Yes. Anyways, zooming forward to May 22 today. So two years later, one year later, Justin John, Donald Trump's campaign says he will build a bitcoin and crypto army to defeat Joe Biden in the presidential election.

Followed up by a news report out of bitcoin magazine says Joe Biden's campaign is asking for donations, saying cryptocurrency executives are backing Donald Trump and out raising them, rushing $800,000 checks at see events. This is the same day that Trump started accepting bitcoin and crypto for campaign donations, followed by this, this next part of the story, which I thought was pretty interesting. And I don't think too many seed people saw this analysis going around on crypto. This is Sean Tuffy, who I think is, just pays attention to the political establishment. He says.

I mean, I'm more critical of crypto than most, but this is basically how any lobbying effort works. The issue is, and I'll put my hands up and say, I'm guilty of this. In the past, that the anti crypto faction thought that the whole thing, the thing being crypto, would just disappear. So they had no plan b for the eventual possibility that maybe the crypto army doesn't disappear. So the calculus behind Elizabeth Warren and the Biden administration anti crypto army was that crypto was just going to die, and then they would be able to, like, take credit for, like, yeah, we, like, we stamped out those, like, crypto bros.

Ha ha ha. And, like, you can, you kind of can't blame their naivety because every single bear market, like, people post articles like, bitcoin justice. Bitcoin just died. Bitcoin is dead. And so they, I think they just did that.

But, like, a political version. Yeah, they were like, now's our time. Ft. Now's our time to, like, take this free real estate of claiming victory over this, like, crypto army by building an anti crypto army. Uh, meanwhile, it turns out the crypto army did not go away.

In fact, we just got stronger and we got rallied as a result of this. And then today, this morning, Cynthia lummis tweets out. Senator Cynthia Lummis tweets out, we are building a pro crypto army in Congress after we all force the Democratic Party to do a 180 and give us what we want. So now, as a conclusion of all of this drama for the last, like, year and a half after choke point two point zero, the incoming election, Biden versus Trump, Gary Gensler and the SEC, we now have two political parties, Democrats and Republicans, both fighting over the crypto vote. So everyone just give yourself a pat on the back because that was a very hard two years, you know, and we did not deserve it, but we're coming out winning on the other side.

Ryan Sean Adams
I think, you know, part of us did deserve it, but you gotta, you gotta hand it to Elizabeth Warren. I think we didn't deserve the oppression. Oh, yes, yes, yes. We didn't deserve to be treated like how the Democrats have been treating us. You gotta hand it to Elizabeth Warren, though.

I think what she accidentally created was a pro crypto army through this resistance. Again, never seen crypto so unified. David, we got more to talk about. What's next? Coming up next.

David Hoffman
Now, with all this bullishness, did this reopen the window for large protocol airdrops? Because there are not one, not two, but three a tier companies that are all teasing their airdrop for next week and maybe the week beyond. There's also an update in the uniswap versus SEC case. And also, did Nigeria just kidnap a crypto executive from Binance? We're going to talk to you about all of this and more.

But first, a moment to talk about these fantastic sponsors that make the show possible. New projects are coming online to the mantle layer two every single week. Why is this happening? Maybe its because mantle has been on the frontier of layer two design architecture since it first started building mantle da powered by technology from Eigenda. Maybe its because users are coming onto the mantle layer two to capture some of the highest yields available in Defi and to automatically receive the points and tokens being accrued by the $3 billion mantle treasury in the Mantle rewards station.

Because the Mantle team is one of the most helpful teams to build with, giving you grants, liquidity support and venture partners to help bootstrap your mantle application. Maybe it's all of these reasons, all put together. So if you're a dev and you want to build on one of the best foundations in crypto, or you're a user looking to claim some ownership on Mantle's defi apps, click the link in the show notes to getting started with Mantle Celo is the mobile first EVM compatible carbon negative blockchain built for the real world, driving real world use cases like mobile payments in mobile defi and with Opera minipay as one of the fastest growing web three wallets, Celo is seeing a meteoric rise with over 300 million transactions and 1.5 million monthly active addresses. And now Celo is looking to come home to Ethereum as a layer two optimism, polygon, Matterlabs, and Arbitrum have all thrown their hats in the ring for the Celo layer two to build upon their stacks. Why the competition?

The Celo layer two will bring huge advantages, like a decentralized sequencer, off chain data availability secured by Ethereum validators, and one block finality. What does that all mean for you? With Celo layer two, gas fees will stay low, and you can even pay for gas natively using ERC 20 tokens, sending crypto to phone numbers across wallets using social connect. But Celo is a community governed protocol. This means that Celo needs you to weigh in and make your voice heard.

Join the conversation in the Celo forums, follow Celo on Twitter, and visit celo.org to shape the future of ethereum. Have you ever felt that the tools for developing decentralized applications are too restrictive and fail to leverage advancements from traditional software programming? There's a wide range of expressive building blocks beyond conventional smart contracts and solidity development. Don't waste your time building the basics from scratch, and don't limit the potential of your vision. Cartesi provides powerful and scalable solutions for developers that supercharge app development.

With a Cartesi virtual machine, you can run a full Linux OS and access decades of rich code libraries and open source tooling for building in web three. And with Cartesi's unique roll up framework, youll get real world scaling and computation. No more competing for blockspace. So if youre a developer looking to push the boundaries of whats possible in web three, Cartesi is now offering up to $50,000 in grants. Head over to Cartesis grant application page to apply today and if youre not a developer, those with staked CTSI can take part in the governance process and vote on whether or not a proposal should be funded.

Make sure youre vote ready by staking your CTSI before the votes open. Are we getting more airdrops? Coming up? Tyco, which is a layer two on Ethereum that is EVM equivalent. DK Layer two, with some base roll up features as well, had released their airdrop tease video explicitly saying airdrop coming.

So we got a taiko airdrop on the way. Cause it's a blimp through the clouds. I get it. And oh, the blimp says airdrop. All right.

Mainly that's the one. The blimp literally says airdrop on it. It's not a joke. Also Zksync. There's been rumors going around that Zksync is aiming for an airdrop drop in early June, that there's a token generation event.

They're going to mint a token this week and then the airdrop will occur 30 days after token generation event. And ZK sync is a big one. Has been around since I've been, I've been around in crypto. DKC was actually the first time I ever use ZK technology to pay for gitcoin donations back in 2019. Very cool tech.

And then layer zero teased their v two coming in May 28. I mean, layer zero has been doing the whole anti civil campaign, so that's actually not really a surprise. But they are just being much more explicit about v two. You can only imagine that v two includes a token. Look, I think happy airdrop hunting.

Ryan Sean Adams
I think all three of these could be close to billion dollar airdrops. Like unicorn airdrops. You mean. You mean billion dollars given to users? I think so.

I'm not going to call it, but. Like, the fully diluted valuation of all of these, I'm guessing is going to be above $5 billion for each one of these. Yeah, that feels pretty safe. So that, yeah, whether they each one can give $1 billion away to users. I think that's a good, like, high watermark to, like, aim for.

I hope though, they're big, they're going to be big and broadly distributed. David, what's the crypto punk news? Oh, my God. This is the one. This is the one bearish thing that happened this week.

Really? So cryptopunks. Yeah. A cryptopunk project from Yuga Labs announced Super Punk World, a 500 piece collection. More nfts.

David Hoffman
They're like, they're like crypto punk esque, but they're slightly 3d. They don't look crypto punk esque to me. Yeah, that was the kind of the feedback from like, the crypto punks. The joke was that, like crypto punks, just in order for crypto punks to be bullish, you just have to leave them alone. Just like, don't touch them.

And you go to bitcoin explaining like how these, like little nfts look on the, visually is kind of hard, kind of flat 2d creatures, but with a, with a butt, though, if you notice, like they added, the one part that they added death to is the butt. Oh, yeah. And the butt in the nose. Trendy.

People hated these. They're ugly. I don't want to. They were building these things for the crypto punk community and the crypto punk is like, thanks, I hate it. We don't want this.

Yeah, just leave our punks alone. Stop touching the punks. But didn't they say that? Isn't that so rejected by public commentators that one of the members, the co founders of Yuga Labs, had to put out this tweet? I'm just going to read the last paragraph says, what about punks?

Yuga will no longer touch punks. They will just be decentralized and preserved on the blockchain. The only thing that we intend to do is support a few museums and institutions in their quest to acquire a punk and help educate their audience about them. So I think you guys labs like, yes. All right, guys, we're not going to touch punk.

Ryan Sean Adams
Yeah. In an effort to add value, they like diminished value, I guess so. Good lesson learned there. Uh, David, tell me about the Uniswap wells notice because we found out that some details, there's always some speculation as to what was in the nasty gram from the sec. What it, what it was that Uniswap did to offend the sensibilities of the good old sec.

We found out what those, what, what that is. Right. What are they charging Uniswap with? Uh, so there were three things that we were speculating about when we, uh, heard about the UL's notice for Uniswap. That Uniswap is itself an unregistered exchange.

David Hoffman
The wallet itself is a broker, so is the website. Uh, and then the Uni token is an unregistered security. Those are the three things that we thought the SEC were going to talk about. But two of those things were correct. Okay.

Uh, one of them was incorrect. Uh, it turns out they are not going after the uni token. They are instead, interestingly, going after the LP token and saying that the LP contract is a security. How does that Uni token untouched? But if you are a liquidity provider in Uniswap, you deposit like ETH and us EC into Uniswap, you are a market maker, you get an LP token back in return.

That's the security. This feels even worse because it makes. Even more less sense. It makes less sense. But it also feels even worse because I was kind of wondering, why is SEC suing all these companies for the exact same things?

Ryan Sean Adams
What it looks like they're doing is for some of the same things, but they're trying to create more precedent surface area for winning now against LP positions. Right? If you call that a security, you basically like clamp down, shut down, like a major faction of defi, right? And also like maybe the LP contract. The SEC is like, well, that's an investment contract.

David Hoffman
But where in the unsuccessful protocol are they promising a return? Like LP's actually lose money? Yeah, that's right. That's true, David. Like, what is going on here?

Ryan Sean Adams
Does Gary Gensler just like losing because he's been having a big, like terrible year, losing in Congress, losing the support of his own party, certainly going to lose some of these court cases. This is Hayden Adams. What does he say in the, in the fight back here? He says, we believe the SEC should embrace open source technology that makes markets cheaper, faster, more safe. The SEC is reckless approach to crypto has not protected consumers and cause immeasurable harm in the United States, individuals, businesses and the state itself.

David Hoffman
We should lean on Internet innovation, not stifle it. We are proud of our work. We have nothing to hide. We're ready to fight for Uniswap and defi in court, and we're ready to win. Uniswap Labs also had a response to the LP token.

Specifically, they said the LP token is used as a bookkeeping device to keep track of the asset the user provided in the, to the smart contract and any fees earned on the user's liquidity. In other words, the LP token are issued not for investment purposes, but instead as an accounting tool, and they are therefore not securities, literally just explaining how the Uniswap contracts work to the SEC. Something that's notable about this, Ryan, is that if you map out some of the major tokens in the Ethereum ecosystem versus eth this week, all of the tokens are up versus a dollar, and they're down versus eth, which should be no surprise because ether is getting the ETF. And so, Ethereum layer two tokens, optimism, arbitrum Polygon had pretty strong weeks this week, like ten to 20% price performance, but down versus eth, uniswap unitoken is the only token I could find that actually held its value versus eth. It is flat on the weak versus eth, which means it's up like 30%.

Ryan Sean Adams
Pumped just as hard as eth. It pumped just as hard as ETH. And I have a take about this. What's your take? Because the SEC is going after uniswap.

David Hoffman
And also we thought the uni token, we are seeing a shift in the winds about the SEC stance towards crypto, at least a little bit with the ETH. We're seeing a shift in the winds towards the democratic establishment towards crypto. I think we are seeing the regulatory boot of the SEC getting priced out of the unit. Doesn't matter anymore. It's like we don't care about the SEC's impact on crypto.

Yeah. Yeah, I think that's a great take, and I think that's exactly what's happening. And I think that is even bigger than the inflows. That's why this is in some ways a more momentous week. In some ways not because bitcoin was the first bitcoin ETF, but in some ways, it's even more momentous than the bitcoin ETF because it sets precedent for everything.

Ryan Sean Adams
Not bitcoin. The entire token economy now has some space to breathe. Now there's some oxygen in the room in the United States, and I think uniswap price. I totally agree. You're making me more bullish.

David Hoffman
This is so bullish. Yes. ETh asset had a huge dub this week, but everything else also got a huge dub this week. If any other token ever wanted an ETF, this needed to have happened. This week needed to have happened.

Ryan Sean Adams
Wow. Wow. All right, well, one more thing I want to mention, because he said the crypto punk thing was the only bad news on the week, but there was actually some more bad news, because here's a story. Binance executive denied bail in Nigeria amid $35 million money laundering trials. So a justice in the Federal Court of Nigeria refused a grant to bail out some of the executives that were held in custody.

So there's two executives from finance held in custody. We've talked a little bit about this, but. But the story has just gotten super wild. It actually looks like, David, they're kidnapping crypto people. Okay.

I mean, I know that sounds Alex Jonesy, but, like, they have. Nigeria has a failing currency. The currency is not doing well. They're trying to operation choke point binance and other exchanges in Nigeria, and they're actually picking up mid level executives, arresting them, throwing into. Throwing them into jail, and not releasing them on Bailey.

That's what's going on over in Nigeria. So this is the new binance CEO, not CZ. So someone named Richard Tang that I think the crypto industry needs to get to know. He says this, he writes a whole blog post about it. This was published earlier in the month.

But to invite a company's mid level employees for collaborative policy meetings. This is what Nigeria did. This is like, come on, binance, let's come talk. Only to detain them. That's what they did.

They detained them, putting them in jail. They're under arrest. Has set a dangerous new precedent for all companies worldwide. All right, this is what happens when your government abandons rule of law and starts to go hardcore capital control, anti crypto and authoritarian. I think it's.

It's like. It's like a warning shot, because look at this. The top ten overall apps in Nigeria. This is really, really cool. These are the top ten trending apps in Nigeria right now.

Do you want to read some of these? Coming in? Number one, phantom, a crypto wallet. The Solana wallet. Number two, telegram messenger.

David Hoffman
Number three. And number four, to different VPN's. Number five, tan wallet for the telegram, blockchain. Number six, solflare or Solana Wallet. Seven, Twitter, and then nine, bybit and ten, another VPN.

So basically, we have Solana wallets, VPN's telegram messenger, and a telegram wallet. And so I think that the story here is people are trying to get access to blockchain stuff. It's all specifically Solana. So congrats to the Solana ecosystem. It's all anti authoritarian tech, basically.

Ryan Sean Adams
It's all anti tech. Look at the trend here. And this is what happens in the late stages of capital control. Our best to the binance executive, certainly. David, something else that is relatively historic, I would say is probably the most.

David Hoffman
Historic thing that happened this week. Good week to do it. So bankless just went on chain. So we did a first season of podcast collectibles. Some people collected those.

Ryan Sean Adams
We stopped that at some time early last year because gas fees were too high. We knew we wanted to pivot to layer two. We needed to evolve the strategy. Yeah. And we just launched that.

So we are launching podcast bankless podcast collectibles on the Zora chain in some partnership with Zora as well. And so this is our phase two. And in phase two, you can, with a couple of clicks, mint the entire archive of episodes. And the gas prices on Zora just cost like cents. Nothing.

David Hoffman
Yeah, they're nothing. Mints are super cheap, too. I think it's 0077-0077 for per eth per episode. Eth per episode. Yeah.

Ryan Sean Adams
So it's like a couple dollars, you know, like your two, two, $3. And moving forward, we are minting every single episode. So this roll up, the roll up you're listening to, there'll be a button that you can go click. You want to collect this on chain? I don't know what we're going to do with it at first.

It's a collectible. It could evolve into other things, but it's your bankless on chain footprint. It's really cool. I went and I collected this episode. David, this is our episode with Patrick.

David Hoffman
McHenry, the senator who just talked about fit 21. We have 33 mentors of said episode. Shout out Kenny Eth, who was my Covid walking buddy. Oh, is he our top mentor here? Yeah.

Well, he owns three of the episodes of these episodes. A wise collector, then. So that is going to happen every episode from here on out. We probably won't mention it very often, but it'll always be there for you in the show, notes David. And last monster raise we got to talk about is a farcaster raised $150 million on a $1 billion valuation.

Ryan Sean Adams
Of course, Farcaster is an ethereum based social fi type of app, or, I don't know if you'd call it social fi, but it's like a. It's like a Twitter clone client. We've done episodes with Dan Romero on Farcaster. I would call it meaningfully differentiated from crypto. Yeah.

David Hoffman
What do they call it? Minimum viable decentralization for a social app. Yep. Very cool, though. Absolutely.

Ryan Sean Adams
Monster raise. This is one of the most successful apps in crypto that have nothing to do with speculation, which is also. But you can also speculate on it, you can. Looks like that's what some vc's are doing here as well. David, let's end this historic week with a meme of the week.

You selected this one, didn't you? Yeah. So we all remember the Elizabeth Warren. I'm. Elizabeth Warren is leading a crypto army.

David Hoffman
An anti crypto army. Same graphic. But instead of that, it just says, oh, fuck.

Thanks. There you go, guys. We'll have to end it there. Of course. Risks and disclaimers.

Ryan Sean Adams
None of this has been financial advice. Crypto is risky. You could lose what put in. But we are headed west this time. We've got an ethereum ETF.

This is the frontier. It's not for everyone. Please, God, approve the Ethereum ETF. Oh, my God. This will be a great collectible if it doesn't get.

But we're glad you're with us on the bankless journey. Thanks a lot.

David Hoffman
I'm talking about Susan and Ryan. Sean Adams to the food.

Ryan Sean Adams
Let's go. ETL. E t l e t h e t l. Yeah.

But there is a chance you're doing. Here's what I think it is. Biden and the Democrats. Wake up. It's 11th hour.

They might actually put some political pressure on the SEC and Gensler to just throw a bomb to crypto just to prove the ETF. Okay. I hope you for sure. Yeah, pass. Whatever you're smoking.

David Hoffman
Looked out my window this morning I was thrilled to see a million laser ride. Max is blind in this for me.

Ryan Sean Adams
If you can count on the government. To bring us down, then I guess we'll all have to fuck around and find out. Let's go. Etf. Egl e g h e gl yeah.

Etf it.

ROLLUP: ETH ETF Approved | Crypto Politics | Uniswap Wells Notice | Airdrop Reset?

Primary Topic

Episode Summary

Main Takeaways

Episode Chapters

1: Introduction

2: ETH ETF Approval

3: Market Analysis

4: Political Shift

5: Uniswap Wells Notice

6: Upcoming Airdrops

7: Conclusion

Actionable Advice

About This Episode

People

Companies

Books

Guest Name(s)

Content Warnings

Transcript