ROLLUP: ZkSync Airdrop | Optimism Fault Proofs | Pectra Ethereum Upgrade

This episode discusses significant updates and news in the crypto world, including the ZkSync airdrop, Optimism's launch of permissionless fault proofs, and the upcoming Pectra Ethereum upgrade.

1. The ZkSync airdrop distributed 17.5% of its total token supply to nearly 700,000 wallets, making it one of the largest airdrops in recent memory.
2. Optimism launched the first permissionless fault proofs, a major milestone for layer two security and decentralization.
3. The upcoming Pectra Ethereum upgrade will introduce significant improvements, including Max EB for better validator efficiency and peer DAS for enhanced scalability.
4. Market movements reflect a lack of new money entering the crypto space, with existing funds circulating within the ecosystem.
5. Despite current market stagnation, optimism remains high for future growth, driven by technological advancements and upcoming ETF approvals.

1: Introduction and Vibe Check

Brief overview of the current state of the crypto market and the episode's main topics.

• David Hoffman: "It's the second week of June, and we got a bunch of good news."
• Anthony Cesano: "We're seeing a lot of growth across the industry generally."

2: ZkSync Airdrop

Detailed discussion on the ZkSync airdrop, eligibility criteria, and its impact on the community.

• David Hoffman: "Zksync dropped 17.5% of their token supply in a one-time airdrop."
• Anthony Cesano: "It's definitely the largest airdrop in quite a while."

3: Optimism Fault Proofs

Exploration of Optimism's launch of permissionless fault proofs and its significance.

• David Hoffman: "Optimism launched the first permissionless fault proofs ever."
• Anthony Cesano: "A very, very big day, especially for optimism."

4: Market Overview

Analysis of the current market trends and macroeconomic factors affecting crypto prices.

• David Hoffman: "Bitcoin down 5.8%, Ether down 8.8% this week."
• Anthony Cesano: "There's mostly the same money sloshing around in crypto."

5: Pectra Ethereum Upgrade

Insight into the upcoming Pectra Ethereum upgrade and its key features.

• David Hoffman: "Pectra is about to be one of the biggest Ethereum upgrades."
• Anthony Cesano: "Max EB and peer DAS are extremely exciting developments."

6: Layer Two Activity

Overview of the activity and developments within the layer two ecosystem.

• David Hoffman: "We got $44 billion locked on layer two."
• Anthony Cesano: "Layer two activity has not slowed down with the price slowing down."

7: Macro and Market Sentiment

Discussion on the broader economic context and its impact on the crypto market.

• David Hoffman: "Cooling inflation means we are more likely going to get raise cuts."
• Anthony Cesano: "The market will price this in before it actually happens."

1. Stay Informed: Keep up with major network upgrades and their implications for investment opportunities.
2. Diversify Investments: Consider participating in various airdrops and token distributions to diversify your crypto portfolio.
3. Monitor Market Trends: Pay attention to macroeconomic indicators, such as inflation reports, that can influence crypto prices.
4. Engage with the Community: Participate in discussions and provide feedback on token distributions and network upgrades.
5. Leverage Layer Two Solutions: Explore layer two networks for lower transaction fees and enhanced scalability.
6. Secure Your Investments: Use platforms with strong security measures, like Kraken, for trading and storing crypto assets.
7. Prepare for ETFs: Stay updated on the approval and launch of ETH ETFs and consider their potential impact on the market.
8. Evaluate Restaking Platforms: Research and consider using restaking platforms like Symbiotic and Eigen Layer for additional yield opportunities.

Bankless Friday Weekly Rollup

People

David Hoffman, Anthony Cesano

Companies

ZkSync, Optimism, Ethereum

Books

None

Guest Name(s):

Anthony Cesano

Content Warnings:

None

David Hoffman
Zksync introduces the ZK token, probably one of the more anticipated networks that drop their token. Dropped their token also. I mean, they dropped 17.5%, and it was, like, kind of a crazy large airdrop.

Bankless nation, welcome to the Friday weekly roll up. It's the second week of June, and we got a bunch of good news. I think it's a lot of good news. And also, instead of Ryan, who's down and out for the weekend, hanging out with his AI family like he sometimes does, we're pulling in Anthony Cesano to substitute teach for the bankless nation to cover the weekly news in crypto. Couldn't think of a better person to sub in.

Anthony, how you doing? Hey, I'm doing good. Thanks for having me on as a substitute teacher again. Always love doing these episodes with you. Yeah, we love having you.

And before we actually get into, like, the specifics of the news, like, maybe let's just zoom out. Anthony, just, like, quick vibe check. Just, like, how are you feeling? We're in kind of a weird spot. We've gotten really good news.

We've gotten some cool innovations that have happened this year. Uh, it's definitely been a very fun year overall. Like, what would you just say this high level about just the vibe of everything right now? Yeah, yeah, I think the vibe's a little weird right now. Depends on where you look.

Anthony Cesano
If you go on Twitter, I think the vibe is different to going on, like, some private discord communities that you might be a part of, or even public ones that you might be a part of. I think everyone's still very, very excited about the tech and all the developments that have been happening. You know, we're seeing a lot of growth across the industry generally, but, of course, if the price goes sideways for a few weeks, everyone starts losing their heads. So I think, yeah, there's a bit of a disconnect there, but I guess we'll get to point where price starts going up again and the tech will be good and everything will suddenly be good for a few weeks as well. Yeah, it does get hard to, like, decouple price action from, like, the sentiment of almost anything else.

David Hoffman
But there is a lot of other things that I think are just, like, pretty crazy things that happened this week. Crazy. Big Zksync, one of the oldest and most longstanding layer twos, dropped their ZK token. So we'll talk about who is eligible and what's the sentiment around that optimism. One of this is one of the big things I've been referring to launched the first permissionless fault proofs ever.

So if you have been paying attention to the just technical advancements and decentralization of a layer two optimism got a green slice on their layer two beat security. Orange as you call it, Eigen layer gets a competitor. They got the juice. Brand new competitor on the scene. This one's a little bit different than the others.

And also it's kind of like acquisition week. This week we saw like three or four major acquisitions. We'll talk about all of them as well, and something that's going to be very useful to have Anthony here. Pektra is about to be one of the biggest Ethereum upgrades. It's chock full of upgrades and so we're going to talk about just everything that is in the Petra upgrade and when it is coming.

But first, of course, our friends and sponsors over at stakewise want you to know what they're up to in the world of liquid staking on Ethereum. If you're a solo staker but your ETH is locked up in a liquid because you're solo staking, you can continue to be a solo staker in the stakewise protocol while also being able to mint OS ETH in order to use your solo staked ETH in Defi on layer twos, in Eigadlair or anywhere else across the Ethereum landscape. You get to keep your rewards that your node is earning while doing more with your ETH. And if you're not a solo staker, stakewise is introducing a vaults marketplace to choose perks that you want to add onto your staked ETH between custom MeV strategies, DVT insurance APY boosts all things available through the stakewise faults marketplace. There is a link in the show notes.

If any of this stuff peaked, you gotta talk about the markets. It's not the greatest week in the markets. We are down across the board. Bitcoin down 5.8%, started the week over $70,000. Ending the week 66,800 ether, kind of even worse.

Start of the week 3800, down 8.8% to 3475. So we were really like pretty riding high, especially the Ethereum community post ETF and we just like couldn't keep it going. We just like lost steam, uh, overall just like. Any comments on the price action, Anthony? Yeah, yeah, I think what it really just keeps confirming is that there doesn't seem to be any really net new money coming into the ecosystem for quite a while now.

Anthony Cesano
Obviously BTC has some new money coming in via the ETF's but even that, like, people don't realize that just because money's going into the ETF's doesn't mean it is a net buyer of bitcoin. It can be doing a complex kind of strategy in the background where it could just end up being flat, where essentially you're logging the ETF and then shorting, uh, uh, uh, shorting the market generally on BTC. So your exposure is basically flat there. So, yeah, I think that because of that, it means that pretty much everything else except BTC is bleeding pretty hard. Eth, of course, got the ETF's approved, but they're not live for trading yet.

We're expecting them. Well, at least I am expecting them to go live next month, hopefully for trading. But, yeah, until they actually live, there's. There's no inflows. Right.

So people are just really speculating, still speculating on what those flows will look like, and it's the same pool of money rotating around. I really do firmly believe that there's mostly the same money sloshing around in crypto and has been for quite a while. There's not really any net new money in, like, no one that I know in real life. Like, literally no one that has, is not just in crypto already has even, even whispered a word about crypto to me, and they know how much I'm in crypto. It's like, very uninteresting for them right now.

There's no fomo. I think people, especially if they were in 2021 slash 2022, they're still burnt from that because I think we tend to forget how bad that was for the average investor. You know, things like terror collapsing wiped out so many people that had just come in and were new people. So for them to come back, I think they're going to need some really strong fomo, and I don't think we're going to see that until BTC and ETH are firmly in price discovery. And the mainstream media every day is saying, look at these new all time highs, get in now, or actually going to miss out, sort of thing.

So until that happens, I'm not surprised at all by this kind of price action because of the fact that the new money is just not coming in right now. Yeah, the bitcoin chart, it's pretty interesting. We've never seen. Maybe you can correct me if I'm wrong. We broke all time highs, but we did not see price discovery.

David Hoffman
I don't think anyone was expecting to break all time highs and immediately skyrocket, but we broke all time highs in March of this year, and it's now like, like, well into June. How many, how many months is that? Like four. It's been pretty crazy to break all time highs and then not like, do anything meaningful, like four months in a row. Yeah, yeah.

Anthony Cesano
It usually happens where it'll kind of hit the all time high, the old all time high, hang around for a month and then go into price discovery. But because this cycle has generally been quite weird and quite accelerated as well, I think that maybe the market is trying to, quote unquote, get us back on track into that classic four year cycle meme where essentially BTC will go sideways for a little while and then start going into price discovery to catch back up to that. But, yeah, we've not seen this kind of lag before from BTC going to its old all time high and then, yeah, it's four months or something. Three, four months and not going into price discovery. But again, I think that speaks to the fact that there's.

Yeah, there's, there's not really new money coming in. And the BTC ETF money is what's keeping BTC so relatively strong as well. Like, it's very, very strong, even against ETH, which I consider to be, you know, just as good as BTC, if not better, from, from my perspective there as an asset. Uh, yeah, I just think that's the phenomenon that we're seeing right now. It's not going to last forever.

And I also think that there is the phenomenon of the summer lull. Like, 90% of the world right now is in summer, in the warmer months. So they're not sitting around their computers trading crypto. Right. They're outside on the beach, you know, having fun, and that's traditionally what we've seen.

But then you can look at the stock market, and stock market's doing really well and going, you know, bananas, basically. But I think the stock market is definitely very different to crypto. Crypto super risk on stock market, not so much. Especially like the top ten, which carries the entire stock market. Top ten stocks.

People don't treat that as a super risky, I'm going to throw this in for a hunt sort of thing. And we're looking at the ETh bitcoin ratio on this, on this screen right now. And we had, this is a pretty crazy green candle from 0.045 to 0.057, but we've retraced almost half of it. And ether USD is definitely suffering in comparison to bitcoin in the last week or so. Again, down 9%, 8% this week for ether and 5% for bitcoin.

David Hoffman
And of course, ether just doesn't have those flows. We have the speculation of the ETF, but we don't actually have the flows of the ETF. And I think, like, the entire crypto market that was going to buy ether because of the ETF getting approved did that. But then, like, that was we, we shot our shot and now we're kind of just waiting for the flows to kick in. Uh, and we got a rumor out of, uh, this week.

Uh, well, not a rumor, but a mention of Gensler. Genzel, Gary Gensler talking about when the ETF s one s might actually get approved. And he says sometime this summer, which I will say is now. Now is the summer. And so, like, it's still a pretty, like, wide range of time.

I think we've got, like, one more month. Like, early July is kind of my timeframe. I don't know if you have any opinions on, like, when you think the ETF might actually start trading. Mm hmm. Yeah, I'm in the same boat.

Anthony Cesano
Early July. I gave a date on my own show of July 8, not based on anything other than kind of speculating that maybe it doesn't go live in the first week because of the July 4 holiday in the US. So it could be July 8, which is the Monday following. But I feel like it's not going to take very long because the s one s are basically copy paste from the BTC ones. It doesn't seem like there's going to be a lot of back and forth or feedback or anything to be rectified.

So, yeah, I feel like it's going to happen sooner than people think. But I guess in the next couple of weeks we'll get a better picture of that. Quick update on the layer two ecosystem. We got $44 billion locked on layer two arbitramagang coming, still having a healthy lead over everything at almost $18 billion. We're down at 9% in TVL, but that's just because of the ether price.

David Hoffman
But then the activity on layer twos is staying pretty damn high. I'd say we're at an eleven scaling factor. So you can really just see the Denkun, the 4844 blob space, hard fork into Ethereum, and then we've just been holding this pretty high level of activity. Anything you want to comment on the layer two activity? We're definitely going to talk about optimism and their fraud proofs later on, but globally, any comments about the layer two space?

Anthony Cesano
Yeah, yeah, I mean, it's just continuing the trend that we've been seeing, especially since then. Coon went live, as you mentioned, of usage going up and up and up because we basically gave more capacity for users and they're using that and there's more apps going live and there's more interactions happening. It's great to see. I mean, I don't think the l two activity has slowed down with the price slowing down at all, which is even better to see because as you were talking about earlier, we would love to see more and more of that decoupling of price and tech fundamentals and usage of products on chain. And I think we've been seeing that lately.

So every metric that I'm tracking with regards to layer twos, specifically like the top layer twos or like base and arbitram one, things like that, right. Even, even the smaller ones is still up and to the right. People are using, the people are getting value out of them. And you know, sometimes people say, oh, people are just airdrop farming. Well, it's like, no, because arbitram already has a token.

They're not doing another airdrop. So their usage going up is not airdrop farming of the arb token. Base has said multiple times they're not going to do a token. Whether they do or don't is another thing. But we know that a lot of this activity is a natural thing, an organic thing.

People aren't just farming things, they're using it. They're getting value out of it, which is what I really love to see. There switching into the world of macro. We got a FOMC day this week where this is where the Federal Reserve comes together and tells us whether or not they're going to raise lower or hold steady interest rates. Then we also get the inflation report.

David Hoffman
So that inflation report came in pretty cool. Inflation this last month was lower than expected, which means that we are more likely going to get raise cuts. That's the general thought. But we did not actually get any raise cuts announcements. So we have indicated that there will be one raise cut coming this year.

But that's no new information. That was already priced in by the market. But I definitely remember waking up one of the days this week after the FOMC day and hearing the indication of cooling inflation. And I think that's what caused like a pretty good day in the markets. Ether was jumped like $200 or something.

We have, of course, since retrace, but at least the market favorably reacted to this FOMC day. Yeah. So I think people because they saw the Canadian Central bank and the European Central bank or the ECB cut rates. I believe last week they thought that the Fed would be signaling that they're going to cut rates. And I think that it's eventually going to happen.

Anthony Cesano
But I think people are a little bit of wishful thinking there of like, oh, it's going to happen now? It's like, maybe not. And markets are forward looking, too, where they'll speculate on this before it actually happens. Uh, and I think that markets have been doing that for quite a while now. People forget that inflation actually peaked in June of 2022, which was when ETH bottomed.

You know, ETh bottomed at 882 years ago now, and that's when inflation peaked in the US, not, not anywhere else. But I guess us is the main market we, we kind of look at within crypto. And then since then, things have really been up only for Ethan, BTC specifically. But yeah, I think if the market wants to be more risk on, if people want new money to come in for the long tail of assets, it's definitely going to require the quote unquote cheaper money. Right.

Looser monetary policy. You can't really have this in a tight monetary policy regime because people are like, well, why would I go speculate on this super risky stuff when I can just buy treasury with my cash and get a guaranteed kind of return there? And especially because inflation has, you know, it's still relatively high and it's still adding to the cost of living. People just maybe just don't have that disposable income to go and gamble and degen on this long tail of assets. So that's what everyone, I think is thinking about and looking at.

But as I said, the market will price this in before it actually happens, like these cuts. And when the fed starts cutting, I don't know, like, I'm not a macro expert, we're going to see if they keep cutting down to what they were before and what inflation does, because it's really just a tricky game of managing the cuts versus inflation. And it's, it's a fine line. I wouldn't, I wouldn't like to, to be in Jay Power's position, that's for sure. I've definitely just noticed a lot more conversation about the cuts over the last, like two weeks or so.

David Hoffman
The conversation has, has picked up in, like, intensity. And I think if there's one theme I've kind of just felt between the ETH ETF that's been approved, but not live and like having super high interest rates that people generally understand are going to get cut. Like, there's just an air of anticipation. Like, we have, like, stars that are aligning, but, like, they're going real slow. They're going in slow motion.

And so, like, people are generally bullish, but they don't want to get too bullish too fast because, you know, prices can still move against you because there's plenty of time before these, like, stars do align. That's kind of like my sentiment. Yeah. Yeah. I think that's just probably the phenomenon of how fast information travels versus how slow these things take to play out.

Anthony Cesano
Like, we, you know, information travels so fast because of the Internet 24/7 everyone's always, like, hyper informed. You know, you can be as informed as you want to be, but then the actual process, the actual reality of it playing out takes a lot longer, is a lot slower because a lot of these systems are still in the old world. I mean, the fed is a very, very old institution. These notions of kind of rate cuts and inflation and the macro environment generally tends to move very, very slow, not just because of the systems that are in place, but also because it's a huge beast, whereas the information will move at light speed, quite literally. Right.

So there's a mismatch in timelines there. And I think that is actually, that explains so much of the market movements and so much of the market sentiment generally. And I recently had my two and a half week break from crypto. I went away and came back, and I didn't really feel like I missed anything, even though I know within those two and a half weeks, things will. You miss quite a lot and nothing at all at the same time.

That's what I. Yeah, exactly. That's what I'm saying. So, like, I feel like there's so much news and so much information that gets spread around, but the actual reality takes longer to play out. So you can go away for months at a time and then come back and be like, okay, it played out.

You know, I heard about this, you know, months ago, but now it's finally playing out. So there is a mismatch there. Yeah. And definitely a plus one to the idea of patience around these things. This is a tweet from Hong Kim, who I believe works at Bitwise.

David Hoffman
So, yeah, co founder. Excuse me, co founder, Bitwise, who says, yes, $14 billion in net new flows into the bitcoin at ETF's in the first six months has been a remarkable success. But people don't realize that the gold ETF's had positive and mostly increasing flows for the next eight years after its own successful launch in 2024. So basically, Hong Kim saying we should pat ourselves on the back because we got all these fantastic flows into bitcoin. But also the idea, the reason to be bullish is that the flows don't stop coming.

We get further flows, and of course, we're hopefully about to get the same thing for ETH. And so sitting on your hands, understanding that anticipation, but also being Zen about it and knowing that we're destined to fall. Helwa, perhaps if you have an ETF behind your asset is like the takeaway that I'm getting from this. Yeah, same here. I mean, I've been banging the drum about the ETS being a passive vehicle for a long time now, and that's exactly what they are.

Anthony Cesano
They're a passive long term vehicle. They will keep taking inflows over time. But, yeah, it's been very impressive just to see how much BTC has taken in. But I think that was a pent up kind of demand thing because it's been so long since people have been trying to get a BTC ETF. But yeah, I do think that going forward, BTC and then the ETF's will get those passive flows in.

And it may be disappointing for people if they're looking at the daily flows, which is literally noise, it doesn't matter at all. But if you look out, like, as I said, like, you go away for a year and you come back, you're going to see all the flows that happen during that time, and then cumulatively, it will be a lot more than what you expected, I think. Totally. All right, that was the market section. We're going to get into the ZK sync airdrop.

David Hoffman
And of course, there's a bunch of activity across the layer two space as well. So we're going to get to optimism. Brand new fraud proofs, brand new shiny fraud proofs, as well as the rest of the news. So we're going to get to all of that and more. But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Kraken, our preferred exchange to buy the vanilla eth, not the ETF kind, so you can go bankless.

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Dropped their token. So here are some of the details. 21 billion in supply. It is being priced on the pre market on perpetual markets at $36, which is coming in and I think at like an $8 billion network. So pretty, pretty, pretty hefty, of course.

I mean, Zksync has been one of the oldest brands alongside Ethereum that I can remember. I remember donating on for Gitcoin grants, probably actually to one of your Gitcoin grants, Anthony, back in like 2019 using Zksync Lite, I'm sure used it plenty of times as well because I know you're a big fan of gitcoin. In the airdrop, 17.5% of the total supply was airdropped in a one time airdrop. So many other teams layer twos networks have done seasons. CK sync is not doing a season.

They just dropped 17.5% all at once to almost 700,000 wallets. So of that 17.5%, 89% went to users with on chain activity which who became eligible for the ZK sync airdrop, 11% went to contributed. So this is like developers, researchers, educators, like off chain activity that was rewarded with, with an airdrop. So yeah, just want to emphasize 17.5% to 700,000 wallets is like pretty crazy. Um, I think arbitrum did, uh, I can't remember the numbers off the top of my head.

The eigen layer did 5% with another 5% slated for later. Uh, like industry standard has like somehow like converged on like 10% plus or minus a few, um, percentage points. 17.5% like, correct me if I'm wrong, Anthony, but that, that's like the largest airdrop in terms of supply that I can remember. Yeah, no, it's, it's the same for me as well. Like, it is definitely the largest airdrop in quite a while.

Anthony Cesano
I don't remember which ones in terms of major projects, which ones were larger. I think, as you said, the trend seems to have been it gets smaller and smaller, or gets broken up into seasons. And I've been a big advocate of not just, like, bigger air jobs, but, like, bigger community distribution. And I think that with ZK sync, the community contribution came out to around 67%, I believe with team and adviser investors getting about 33 ish percent, which is much better than what the industry standard has been up until now. I think the industry standard tend to have been 50 50 split, where a lot of that would go to a treasury instead of to the users from day one, which I think is actually detrimental to a token, because what ends up happening is that tokens open up at a pretty high, fully diluted value.

Maybe there's only 5% of the token circulating, and then the market has to price in another 95%, or up to 95% of tokens coming out over the next few years, which has been a trend that I hope to see reversed in the coming future. I mean, I'm personally trying to be the change I want to see in the world and talking to projects about this and trying to get them to come over to my belief that have a large float, have a big float from day one on the market, so you can have actual price discovery on this stuff. But ZK sync definitely is pioneering it here, which is really great to see. I mean, as I said, 17.5%. Yeah.

Seems to be the largest in quite a while. Yeah. So just to really put some numbers in here, investors of ZkSync will own a supply of 17.2% versus the 17.5% that's airdropped to the community that is airdropped, and then the team will own 16.1%. So the Airdrop supply is larger than both investors and the team. And overall, they have this pie chart that we're looking at where there's also a supply of a token assembly.

David Hoffman
I kind of think that means it's like a foundation of sorts, is what people would think. And then ecosystem initiatives, which I think is incentivization campaigns for the future. So they're classifying these two things in the community section, which comes out to two thirds of the total token supply allocated to the community, both past, present and future. And then one third is allocated to the team and investors. It is pretty nice to see the airdrop larger than investors and teams.

It's part of the ethos of crypto. It's hard to follow through on. It's hard to convince projects to follow through on. Also, it's just not in VC interests either. But ZK sync just showing the way and covering a path, I think that's pretty cool.

Anthony Cesano
Yeah, I think there might be a little bit of a caveat to that, generally not just applying to ZK sync, but just generally in that another kind of pool of entities in there is quite small relative to the kind of airdrop pool. So, for example, you might have like maybe a couple of hundred individuals that make up all of the investors, whether they be angels or VC's, and then they have different percentages of the supply. You know, there's usually a lead vc in rounds that take a huge chunk of the supply, so they may have a huge chunk there, and then you've got the airdrop going to tens of thousands, hundreds of thousands of individuals. So it's a bit different like that, but it's hard to plan for that. Like, even if you were to do an ICO, go, you know, one whale can come along and just buy up so much of the supply, right?

So the only way to actually get proper distribution is have years worth of price discovery through multiple cycles. Like how ETH had, like how BTC had to actually get good distribution. You can't plan for it. It's very, very difficult because there's always the whales that are around whether you do an ICO or do it as a private, you know, investment rounds. And even if you try to get around that, it's difficult, very, very difficult, because there's no on chain identity yet, right?

There's no. No one uses on chain identity products to try and do civil resistance and stuff like that. So essentially you have this game of trying to balance things, but no one's gotten it right so far. But I feel like Zksync has done pretty well on the distribution side of things. Yeah.

David Hoffman
One more caveat about the 17.5% airdrop. Zksync users got 89% of the 17.5%, and then 5.8% of the 17.5% was sent straight to native applications on Zksync, which were then given the mandate to do what you see fit with these tokens, use it for incentivizations, further airdrops to your community members. And so they did the kind of the model where in addition to airdropping to their own users, they also airdropped to projects with a mandate to drop to their own users. Okay, so let's unpack how people actually got eligible for the Zksync airdrop, because this is where a lot of the tension over the airdrop was felt. You needed to accrue one point, and there were six, seven different ways to accrue a point, and you just needed to have one point.

In order to be eligible for the Zksync airdrop, you need to have interacted with ten contracts on Zksync era, or deposited liquidity into DeFi protocols, or used one of the account abstraction paymaster accounts on Zksync era, or traded ten ERC 20 tokens, or held one of the native Zksync era nfts, or on the Zksync Lite network donated to a gitcoin round, or at least transacted three different times. If you did one of those things, you became eligible, and then there were further activities that you would have earned to have add on a multiplier onto your eligibility. So if you read the blog post, which I highly encourage people to if they want to learn more, the ZK sync team shared some of the philosophy of how they wanted to drop their token. Obviously, it's pretty well known that Zksync is one of the most botted networks, Sybil networks out there, because they have been from the earliest of days very explicit about the existence of their token. The founders and the team said, yeah, there will be a token.

That's how you decentralize a network. We're not going to hide that. As a result, that was the magnet towards a bunch of sibling activity. In their blog post, they talked about how they wanted to identify and reward people on a human first approach. So they tried to identify human like behaviors such as using smart contracts very early in their existence, rather than trying to hide amongst the crowd.

They say humans tend to be risk on and other criteria just to try and parse out what is a human. After they develop the criteria that would reward humanness, then Zksync added on a pretty light, light handed sibling filter as well. So not trying to just filter out every single Sybil, but just admittingly letting some sibyls in because they still nonetheless overemphasize rewarding human behavior. Just a very light Sibyl filter on the end of things just to kind of pull out the most egregious ones that was their philosophy. If you go into Twitter, you will see a ton of discussion about all of these things and signal is being thrown all over the place.

You can only imagine that if there are Sybil accounts and Sybil farms, they also know how to sybil Twitter too. Deriving noise, which is something that we do at bankless because we cover these things, we generally have teams on for live streams. We definitely cover the token drops. Getting people's feedback is always very difficult because people are just shouting left and right that you don't have a lot of time to capture feedback. Overall, like, maybe I have my thoughts and sentiments.

Anthony, maybe I'll ask you about. About yours first. Overall, what are your thoughts about the feedback about this token drop? I mean, I think my general thoughts about airdrops, just generally, not just specific to ZK sync, is that they are all heavily farmed, right? And they are all heavily botted.

Anthony Cesano
And it's not just on chain, it's also on Twitter. Because Twitter has done nothing to curb the usage of bots. They are absolutely rampant on there. And it's naive for people to think that, that people aren't taking advantage of this to steer sentiment for certain reasons, right? Like, we saw this play out with Starknet doing their airdrop, there was just a massive amount of hate because the Sibyls didn't get what they want, what they wanted.

So essentially what they do is if they're already part of a massive kind of operation running many different addresses to try and Sybil, to get more money, they'll go on social media, they'll start fighting the project, and then they hope that the project caves and changes the distribution to give them more. And this has happened a few times with other projects. And I think if you do the math on it, this is not small change we're talking about. I saw something on Twitter that there was one entity tied to 65,000 addresses. Now, if you are controlling those 65,000 addresses, you are obviously going to be, you know, smart enough to go on Twitter, get a bunch of bots spun up, and then try and steer sentiment so that you can get the team to actually reward you.

Because if the team then says, okay, well, we're just going to give every address that ever used our protocol, even $100 worth of tokens. If you own 65,000 addresses, that's $6.5 million. Right? So just putting the math on these are people to understand the gravity and the incentives here. And when you follow the incentives, that's what you get to.

And the bot activity is very, very obvious. As much as they try to act like they're not bots, it's extremely obvious which ones are bots and which ones aren't. And now with AI taking off as well, they, you know, they may try to hide themselves a bit better, but it's still very, very obvious. And I've been watching you tweet about this and seeing all the replies to your tweets. And I actually, before likes were private.

I went through the likes and I looked at the accounts. 90% of them were bought accounts or hacked accounts because a lot of them will say joined 2015. But they're hacked accounts, they're accounts that have not been, that don't belong to the original owner, and they've got no mutual follows with me at all. They're just retweeting. Everything got to do with like, airdrops generally.

So, so it's just very, very obvious once you go into it. But now that likes it private, you can't even do that anymore. So yeah, it's a bit of a mess. The tweet that I'm showing on screen is a reply to a tweet that I said. I'm collecting feedback on the ZkCzk token trap.

David Hoffman
Please let me know your thoughts. And also, if you're in the bankless discord, you can at me in the Airdrop Hunter channel directly too. And this was the most liked tweet in response to my tweet, and the response about what the changes ought to be would be reduce the allocation for the team lower the highest max allocation from 100,000 down to 25,000 to 30,000. Allocate more tokens according to their fees, spent their active days and weeks and months their paymaster, which is a contract native bridge volume and then light transactions give allocation to the minimum 1 million to 1.4 million wallets and then multipliers for old active wallets. Basically every one of these suggestions is take away tokens from the fat tail and give it to the long tail.

And this tweet happens to have like an insane amount of like 1.2 thousand retweets, like 2.5 thousand likes. And if you just go down to the comments, it's just like, it's just incomplete. And so it's hard to parse out signal and noise because I will also go into the bankless discord. And I don't want to say that this particular token drop was unrelentingly beloved by everyone. There is everyone that has problems with the token drop.

But if you go into the bankless discord, there's problems. People will say, hey, I think I should have gotten allocation for my wallet that used argent or CK sync Lite, but I didn't, and I'm disappointed by that. There will. People say, I'm very happy with this. Airdrop is good for me.

And then there are people say, look at these bot farms. I'm upset by this. But, like, the feedback and conversation in there is like, like, coherent. And, like, everyone has a different opinion. And then you go onto Twitter and everyone has the same opinion, and it's just like, give allocation from the fat tail and give it to the long tail, which is just like, in my opinion, like, if that, that's just like, oh, you want, you want sybils to be rewarded?

That's kind of exactly. And it can't be more obvious. I don't understand why people like, like, it can't be more obvious if you want to reward the long tail, right. And you know that there's lots of symbols there because we have on chain proof of this is very obvious. Then what do you think's happening here?

Anthony Cesano
And as I said, once you put the math to it, this is not small numbers. This is very much worth someone's time to go out there and steer sentiment if they can get the team to cave and reward them for it, because then they just go off and, yeah, they've made a lot of money for very little effort because it's just bots that they're running that are very readily available. And there are probably, like, teams that do this, like, teams of people where it's become, like, industrialized for them to do this because their payout is so large. So, yeah, I don't know why anyone is even doubting that this happens, given what we've seen in crypto. Anyway, like, outside of this, the incentives are there to do this.

David Hoffman
Yeah, it's totally rational. Even ZK sync is making, like, tweets. Here's a tweet that they made with response. Meanwhile, something important you need to know. There is a massive, coordinated Sybil misinformation campaign against ZK sync on X run by thousands of bots.

And so, like, they're not even, like, saying, like, hey, we'll try and, like, get feedback. They're, they're just going full frontal is, like, declining the legitimacy of a lot of these requests. I'm out here at Edge City Esmeralda, which is a pop up city kind of like Suzalo, and there's a couple of Zksync members here. And just like the Zksync team is working 24/7 just trying to gather data, trying to gather information. And then they put out a tweet today and said, we believe in our choices.

We're going to keep with the path. We're not going to change anything. And maybe they could have had enough data to be more precise about the distribution of their tokens. But the DDoS attack, that is a Sybil attack, just robs them of that opportunity. I have been on the receiving end of many Twitter mobs.

It feels like a DDoS attack on your brain. It's impossible to parse signal from noise. Anyways, that was that. I would also like to say, to tie off this section, the fighting between Sibyler's users and teams is actually a symptom of SEC governance failure. Uh, this is the opposite of what a fair and orderly market looks like.

Uh, this is like capital being wasted, capital being destroyed. A lot of the siblers were like, I'm bummed that I didn't get. Like, some of the siblers were like, I'm bummed that I didn't get the token, but at least give me my gas fees back. So, like, that is like inefficient capital being destroyed. Uh, and all of this is because of this, like, kind of unfortunate airdrop paradigm, uh, which we could have, have a much better equilibrium if Gary Gensler and the SEC allowed us, but.

But they don't. And to tie off the token, not to be ignored, Tyco, which is a much newer layer two on the scene, a base roll up. We did a show with them on the bankless premium feed with Justin Drake as our technical coast. If you want to learn all about Taiko and what a base rollup is, their token drop also went live. So 5% of the initial token supply, 50 million tokens, can now be claimed by eligible users.

Taiko, like, much more recent project with a much more recent mainnet. Like, Mainnet, went live just a few weeks ago. Like, how did it get to a token so quickly? Part of that answer is a base roll up needs a token to stake to be a part of the functionality. So they needed a token to go out there to be live.

Anthony, any comments or thoughts on Taiko? Yeah, I mean, it's just, I guess, like another airdrop of a big layer two, or layer two generally. As you said, Tyco is definitely newer to the ecosystem. But what interests me the most about Taiko, probably not their token, but the fact that they're a based roll up, which is something that I've been doing a lot more research into over the last couple of months. Just base roll ups generally and pre confirmations and stuff like that, which seems to be like the end game of l two s.

Anthony Cesano
Like if it were to look five years out, that's kind of what I think it's going to look like for most of the l two ecosystem. But yeah, as you mentioned, like they need a token to achieve a lot of their goals around decentralizing, around getting people to run the infrastructure as incentive mechanisms. So yeah, pretty standard airdrop, I think, from them. It wasn't anything groundbreaking from what I saw, but yeah, I mean, people knew this was coming as well. I think it is worth noting that the claim window for Tyco ends July 5, so that's relatively quick.

David Hoffman
I think the Zksync claim window is open until early next year, so you have a pretty big window of time. But nonetheless you can check your eligibility for both Tyco and Zksync using bankless claimables. So if that is a tool that you use, which you should totally should, you can use that and it'll tell you exactly how many tokens you got or did not get. Okay, into the back into the optimistic roll up world. Optimism fault proofs, which are the same thing as fraud proofs and stage one, have arrived.

Open source permissionless fault proofs are live on op mainnet, and with them the op stack arrives at stage one decentralization, a major step forward for the super chain, just to really lay down what fraud proofs are. Fraud proofs are the mechanism in which we remove the multisig from layer twos. So we have currently multisigs on layer twos, on some layer twos in order to upgrade the chain or maybe fix a bug. But of course that also opens up these networks towards exploitation. You can exploit a network with multisigs.

Why hasnt any of the networks done this? Well, because of course theyre building the things. But battle tested fault proofs are the big step to getting a multisig off of the security model for many of these rollups and optimism mainnet. The op mainnet has launched and deployed their fault proof, so they are in production, they are working as intended, which has earned optimism. Two green new slices on layer two b.

So data availability, state validation, sequencer failure and proposer failure are all green slices on layer two b, leaving the last one the exit window, which is just a timer on network upgradeability. And these are the things that are risks to layer twos. And optimism has four green slices out of five. Pretty big day for the op stack, the optimism community for the ethereum roll up landscape. Sassle, give me your thoughts, your sentiments.

Anthony Cesano
Yeah, yeah. A very, very big day, especially for optimism, who have been building this for quite a while now. And for those who may not know, there are two major optimistic roll up kind of frameworks live today. There's the op stack, which runs optimism and base, and a few other networks out there. Then there's the arbitrum stack, which is arbitrum one, and their orbit chains, and kind of like l two s, l three sort of thing there.

And they both use fraud proofs for their security mechanisms here. Now, for me, the most exciting thing about l two s generally, is that they run on a secure l one in Ethereum, and then they can have the optional escape hatch window, where essentially what that means is that if the l two is down for whatever reason, you can and goes offline or something happens, you can still get your funds back on the l one by doing a transaction on l one to essentially your funds out of the l two. That it to me is one of the most, if not the most important properties of l two s. And that needs fraud proofs to be able to work. And that's exactly what op stack has now, and that's exactly what arbitram one has.

But optimism went a step further by making it permissionless out of the gate, whereas arbitrary, still permission. So they have 14 whitelisted actors that can submit these fraud proofs, whereas in optimism's case, anyone can do it. Now, I know that arbitrum is going to move towards permissionless fraud proofs as well. But as you mentioned, this is what this kind of pie chart is, or this pie representation is all about filling in the green there. There are sometimes yellow, I believe yellow is when it's permissioned, and then there's red where it just doesn't exist at all.

And once we have all green across the board, that's when they can move to stage two, decentralization, which is really the end game for these things. And the number one thing I like about these roll ups continuing to progress through these, these stages is that it kills the fud that roll ups aren't going to decentralize. Like, that's a big piece of FuD that a lot of people have been using for a while now, saying that, you know, roll ups and l two s are always going to be centralized. They're never going to be able to decentralize never going to be true. Kind of blockchain, so on and so forth.

But we're proving them wrong each and every day. And every time we do something like this, it proves them wrong. And I strongly believe that there are very, very strong incentives for these chains to decentralize. Centralization is a huge liability. It means that a government agency can come to and force you to do things using your centralized power.

And as a builder of these networks, you do not want that power because you are trying to essentially be as detached from it as possible or from the operation of it as possible and trying to create a decentralized community around it. So if you want that to happen, you need to get to stage two. And I don't think anything is stage two right now. Albert from said that they want to be stage two. Well, nothing that has usage.

There are some that are very, very small, deadly. No, no. If you go, if you go, if you go to some of them, like, they, they really don't have much usage compared to the big players. Right. Like kudos to them for being stage two.

But I don't think it really means anything if you haven't got any, any usage, right, because not, you're not really giving any value to anyone. But, you know, arbitrary one or arbitram has committed to being stage two at the end of this year, which I hope to see it play out. And I'm sure optimism isn't far behind them. And because a lot of the chains are built on the development kits that these ecosystems put out automatically. They get to be, they get to upgrade to stage two as well once they've implemented that.

So, for example, base will be able to go to stage two or even stage one now because op stack has those fraud proofs implemented, which I think is really cool because it means that we're not reinventing the wheel every time. We're allowing this community to come together, build these things out progressively, decentralize. And that has downstream effects on a bunch of other chains as well. Yeah, that's. I think that's really the point of emphasis that I want to drive home since so many chains use the optimism op stack, they just get to take these fraud proofs and put them right into their network.

David Hoffman
So base, as you said, blast as well, which has got $3 billion on it. Mode network, which has $650 million on it. Bob Zora. These are all op stack forks. They will just be able to take these fraud proofs and put them right into their network, which is actually the point of the op Stack framework and why you would use the open source piece of software, because then you get the benefits.

All these networks base didn't have to do false proofs. Actually base is a core contributor of the op stack, so actually this is their technology. But anyone else using the op stack gets the false. They all work together as a collective. I think that's the overall point here, is that we're not just decentralizing the tech, we're decentralizing the development of the tech, which is exactly the Ethereum philosophy, where Ethereum layer one development is very, very decentralized.

Anthony Cesano
And specifically, optimism has always been about following that philosophy, following that, basically mirroring what happens on Ethereum l one. And I think that they're doing that. I think they're doing that in both, you know, in practice and in theory, which is great to see. Vitalik, of course, gave his congratulations to optimism, saying welcome optimism, to the club of stage one plus layer two, meaning layer twos where proof systems actually have teeth. I'm looking forward to seeing many more layer twos join this club soon, especially some ZK ones.

David Hoffman
And then he follows up with, I just have to put the meme of the week here. So we're getting the meme of the week in the middle of the show. Ethereum, where yesterday's FUD is today's solved problem, starting with the very first FUD ever, which was Ethereum will never launch. That was 2014 FUD. Ethereum will never get past the Dow fork.

The merge will never happen. Layer two s will not have low fees. Layer twos are just multisigs, which was the most recent door that the reaper just laid. And then the next door of Ethereum is cross layer two. Ux is too fragmented.

Running a full node takes too much space and Mev centralization and builder censorship. So these are the next things that's on Vitalik's horizon to go slay. Yeah, and we just keep slaying him. That's the point. I think the trend is what you want to be paying attention to is that all of the FUD, or at least 99% of it, has been completely and utterly wrong or has been right for like a short period of time.

Anthony Cesano
Like, and people say the merge will never happen. Well, technically you're right until the merge happens, and then you're just completely wrong. Right. But the thing is, you knew these people were wrong years in advance because you saw that the merge was happening on testnets, on shadow Fawkes, and there was, there was just no way it wasn't going to happen by all logic and reasoning. But of course, you know, Ethereum has its haters, a lot of them unfortunately.

But they keep getting slayed and I'm glad the Grim Reaper is on our side. All right everyone, coming up next, Eigen Lair gets a brand new competitor on the scene and makes a very big acquisition. Big moves in the world of restaking terraform labs. The creators behind Terra Luna agree to settle and pay the SEC $4.5 billion. Where is he getting the money from?

David Hoffman
We got pleaserdao and the Wu Tang album. We got crypto, the game acquisition. We got an alchemy update, all of this and more. But first, a moment to talk about some of these fantastic sponsors that make this show possible. Especially Mantle, one of our layer twos who definitely uses optimism technology under the hood as well.

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Maybe it's because Mantle has been on the frontier of layer two design architecture since it first started building mantle Da powered by technology from Eigen Da. Maybe it's 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. Maybe its 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 its all of these reasons all put together. So if youre a dev and you want to build on one of the best foundations in crypto or youre a user looking to claim some ownership on Mantles defi apps, click the link in the show notes to getting started with mantle taking self custody of your crypto is one of the most important things you can do on your bankless journey. Its also one of the hardest things to get right, with huge consequences if you dont.

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Follow on Twitter and explore the ecosystem built for the real world on celo.org quests. And we're back with a tweet from Sazzle, who's also on the show with us. Pectra the next Ethereum network upgrade is shaping to be one of the biggest in Ethereum's history. The confirmed eips include EIP 7702. I'm not going to list all of these off.

Sazzle, maybe you can kind of walk us through some of these eips and why, what significance they have and why people should care. Yeah, so maybe I should kind of just touch on the ones that I find to be the most exciting and the ones that probably have the most user facing effects here. So as I said, petra, the next Ethereum network upgrade, which I'm speculating will go live in q one of 2025 is shaping up to be the biggest in Ethereum's history because it includes so many things. And I think originally they started off, they being the core dev, started off of wanting to do a relatively small fork to get it out, you know, maybe faster. But there are so many things that people want to get into the network that are pretty critical, mind you, that they're pretty important that it's now become this kind of mega fork.

Anthony Cesano
And the things that I'm most excited about, there's, I guess like probably two or three of them. So number one is AIP 7251, or otherwise known as Max Eb. So what this allows people to do is stake more than 32 EtH per validator, which essentially means that, I think the latest I saw was up to 2048 EtH per validator. So if you're running ten validators today, because you're staking 320 ETh in the future, you only have to run one validator with 320 eTh on it, and everything would be the same. Your block proposal chance will be the same.

You'll get the same kind of rewards generally. But this is a huge unlock for the network because it basically allows us to collapse the amount of validators live on the network while keeping the same security, both economic and security, via how many node operators there are. But we take a massive load off the network, which enables us to keep scaling ethereum as a network generally, which to me is definitely the most exciting part of that. And because of that, it means we basically get to keep scaling up l two s with something like peer Das, which is what I've listed here as well. So peer Das is essentially the first implementation of data availability sampling, which is part of the full kind of dank sharding roadmap, if people have heard of this.

And essentially what this allows us to do is scale up blobs even further, which means even cheaper fees for l two s and cheaper fees for a longer period of time. For people who've been paying attention lately, they may have noticed that blob usage is going up, which means once they actually reach their capacity, fees will start going up, and that means that l two fees will start going up. Now, in order to. Yeah, I think I put a tweet about this just very recently. Now, in order to rectify this or in order to keep scaling up, there are two different things we can do.

We can increase the size and or count of blobs, which basically gives us more capacity, and we can do peer Das and in the future even more stuff around that availability charting, search sampling there, which allows us to scale up even further and without getting too technical. The TLDR is basically cheaper fees for longer for l two s, more sustainable for l two s, and a continued kind of good user experience there. But as I mentioned, Max EB actually plays into this as well because it takes load off the network, takes load off the validators, which allows us to do this in a safer way. And I think that the last thing I'll say here, the last thing to be excited about is ERP 7702, which replaces 74, I believe it was, which is the account abstraction, EIP, which essentially makes normal ethereum accounts, we refer to them as externally owned accounts or eoas on the same level as smart contract or smart wallet accounts there. Now there was a bunch of drama around 3074 around how it was insecure.

Then Vitalik came along and said, hey, why don't we just do it this way with, you know, with 770 two? And essentially that is the ip that is now going into the network there. So a lot of stuff to be excited about. That's just the tip of the iceberg, really. But those are the things that I'm most excited about.

David Hoffman
Yeah. So there's nothing like overly massive, like we're not merging, we're not doing EIP 1559, but there's a lot of pretty more than incremental upgrades to the network. So a lot of massive, I think. Yeah. Result of years worth of research and dev to get us to that point.

Anthony Cesano
It's basically on the same level as blobs, I think, in terms of what it represents for the network, but, yeah, nothing like the merge. I don't know if we ever get something like the merge again. Yeah. And it would be like kind of bad news actually, if we did. Yeah, something went wrong, I think, or we had to like fix something critical.

Hopefully we never get that. Yeah.

David Hoffman
Okay. Yeah, I agree. Pure Das is just like more blob space. Right. And especially with that illustration that you had on your tweet where like we're starting to approach some sort of like fee structure where people are actually going to have to pay, have some sort of contention for blob space.

But this is just what the future of Ethereum is like. We're going to make it have a lot more scale, which we did when we had blobs, and then we're going to fill up those blobs and then we're going to have like another three x increase of supply. That's how Mike nor said it on our episode with him. And so we'll probably have a blob market show up and maybe in the next one to three months and then there will be like a pretty healthy, like people going to have to pay for their blobs rather than blobs being free. And then like you said around, sometime around Q one, if that estimation is correct, we're just going to have more blobs and then transaction going to go be free again and then we're going to that print process all over again.

Anthony Cesano
Yeah, and the thing is, this is extremely bullish. It basically means that the entire Ethereum scaling roadmap is working and Ethereum is growing. Like I would be bearish if blobs remain free forever like that. That wouldn't be a good thing. It would mean that no one's really using them.

Or maybe we scaled them up so much that there's just so much capacity. But I don't think so. As you, as you illustrated, it's a cat and mouse game of we scale up, people fill the space up, we scale up some more, and it's kind of a never ending game. But what blobs allow us to do is basically keep scaling up in a relatively easy manner without having to make substantial fundamental changes to the network. It's literally just a tweak.

Like increasing the count or size of blobs is a one line code change. It is not a big deal, but it does have downstream effects in that it adds more loads to the network. And that's why we do other things like Max Eb, which takes load off the network. So we're essentially doing a swap here. It's like, okay, well let's take off the load from the validators and let's put that, sorry.

From having too many validators on the network. And then let's put that load back on the network via blobs, which actually serves a purpose and actually gives value. To people moving into the world of restaking. Symbiotic has come out of stealth. Symbiotic is they call themselves a permission, permissionless, flexible restaking.

David Hoffman
And so this is permissionless in terms of governance. So I think symbiotic is positioning themselves as a governance minimized governance reduced restaking platform. And then flexible implies just not just eth. Eigen layer, of course has ETH and ETh derivatives. Symbiotic is going for, I guess, everything else.

And so they have opened up what is pretty similar. Like if you're a yield farmer out of eigen layer, an eigen layer points farmer, then a pretty similar thing going on with symbiotic. You submit capital and I could only imagine this would result in the collection of a token at a later point. Symbiotic has been in stealth for a pretty long time now. This is a paradigm and cipher fund backed project, so if you've been paying attention into the retaking world, you've probably caught wind of this.

And a cipher fund is part of the, like, not officially, but just like, it's a bunch of Lido members. And Lido is also, of course, a paradigm incubated. Or maybe not incubated, but just like, alignment with paradigm. And so this is like coming out from that corner of the world. Any, any thoughts, reflections, Anthony?

Anthony Cesano
Yeah, I mean, I'm glad to see Eigen layer getting competition across the board. There's two others that I know of that have come out recently, like, restate platforms and nectar. Yes. Yeah, those two. Yeah.

So there's four. I mean, I think there's going to be more because obviously the opportunity is so big. It's the same. It's the same that happened with Lido. Right.

People saw Lido getting so big and like, why is Lido so big? We can make new liquid staking platforms and restaking platforms that chip into that which has happened. So when the economic incentives are there, people will come up and come with competition. But I do think that we've kind of jumped the shark here a little bit. Like, for me, restaking really only applies to, like, an actual staked asset on a network, like ethereum, like, Eth being staked and then restake.

Like, that's where the actual economic security comes from. If you're restaking, like, it doesn't. Like, some people are saying, oh, we'll restake stable coins. Like what? Like, I'm just a bit confused here.

Like, you know what's staking? For the first time, you're just, yeah, yeah, yeah. And even if you are, like, staking a stable coin kind of LP pool or, you know, token or something like that, it is not restaking as has traditionally been defined. It needs to be securing something. Right?

So I think from that perspective, it's been a little bit weird. I don't know what symbiotics approach is here, but I understand that these other projects need to add more assets because they need to be competitive with eigen layer. If they just said, oh, we're doing e three staking, too, people will be like, okay, I'll just come and farm the token and then leave once I've done that and just go back to wherever I. Wherever I want from that perspective. But, yeah, it remains to be seen how this shakes out.

I think I may have said this on bankless, but I've definitely said it on my show. Show. I think the end game may be that restaking as a primitive just gets enshrined at the protocol. And then essentially what happens is that all of these projects are just competing on the kind of interface front for the users. It's not on the restaking front, but I don't know if that's going to end up happening because there's already so much money sloshing around, so many different incentives around with this right now.

But as I said at the top, I'm still very glad that Eigen layer has competition. I definitely did not want Eigen layer to exist just on its own. Because monopolies, no matter how aligned they may seem, are not good for anyone. Right? Yeah.

David Hoffman
And the murmurings that I just hear from my different corners in AV's circles and LRT circles, and just like, re staking circles, symbiotic has chops to them, like technical chops to them. And so I think the perception is like, this is probably the most valid legit competition to Eigen Lair that's shown up on the market. Just because paradigm is very technical. Cyberfund, with their lido experience, they know what they're doing with liquid staking stuff. And so, let the games begin.

Definitely moving on to the world of Eigen layer. Eigenware made an acquisition of Rio network. Now, Rio network was going to be an LRT project. It had. It was going to be like one of the most like conservative and risk off.

And just like LRT networks that was going to be out there. That was the way that Rio had been pitched. And then it turns out Eigen Lair just decided to buy them. They are not turning them into an LRT. So there is no Eigen layer enshrined LRT.

They're using Rio restaking as trying to implement a spec or an example model of an LRT. But then also, Allen and the Rio team are also just chad operators. So it's in addition to acquiring some of the technology of Rio, they're also acquiring some of the talent as well. And so, congratulations for Rio for getting acquired before even launching your network. And then also, congrats to Eigen Lair for capturing some of the best talent that's out there.

Out there. Any thoughts on this, Cecil, before we move on? Yeah, just the classic aqua hire, and a good one at that, as you just explained there. And this is, I guess, going back to what I was saying earlier about how I feel like all of these restaking platforms, they're not competing on the actual restaking itself. They're competing on the BD, the distribution, the integrations mark like, it's very true for a lot of things in crypto, where they start off being a primitive, but then realize that the primitive is worth nothing without the BD and marketing and community and, you know, integrations and stuff like that.

Anthony Cesano
So they actually move most of their operations to that, and the primitive ends up falling into the background. I think that's exactly what's going to happen with restaking. You know, the restaking aspect itself is table stakes. And then if you are going to be the dominant restaking platform, you need to be doing the BD, the partnerships, the integrations, which. Which is exactly what Eigen layer, I think, has been doing from day one.

And now they're just doing an even bigger way by doing this aqua hire of Rio restaking, which allows people to use that tech within the Eigen layer orbit. Do you remember radar relay, Anthony? Yes. That's an old testing your Ethereum history. Yeah.

David Hoffman
So that was also an Allen project. Alan is the founder of Rio, who now is part of the Eigen layer two team. So, yeah, Alan's been. Been around the Ethereum ecosystem, so he's seen a thing or two. So congratulations once again.

Yeah, congrats to the team, but we are not done with acquisitions. Crypto the game. Do you remember crypto the game, Anthony, did you play? I didn't play, but I think we had a little bit of a debate about this a little while ago where I kind of followed the incentives and was like, I don't know how this just kind of, like, plays out long term, but we'll see. But, yeah, I know of it.

Anthony Cesano
I haven't played it. Yeah. So crypto game, it sucks up a lot of time. So if you're a busy dude, I've heard of people, like, lose their sense of reality because they go down. The crypto game, it's World of Warcraft all over again.

David Hoffman
It's World of Warcraft. Yeah. It is a crypto reality show. A reality game show that's happening in real time, in the interwebs, on telegram, in Zoom, but then also once a day, there's a Hunger games, like, game that is played, something you have to go do scavenger hunt on the Internet, scavenger hunt in real life sometimes. But then at the end of every single day, there's a process of elimination, and so it's both like kind of Hunger Gamey where there's a game every single day, but it's also squid gamey where there's like, it starts off with like 1000 people and there ends up being one winner to win.

I think somebody won like 84 eth at the end of the ten day game. Anyways, this was acquired by Uniswap, of all people. And so they say, crypto the game tweets out, excited to share that we have been acquired by Uniswap. We're forever grateful to our players. We have, we now have the full voice of Uniswap Labs behind us.

We're going to make it, use it to make season three the best one yet. And of course, Uniswap also puts out their blog posts as well. And so Uniswap is just saying they're investing in on chain experiences and so kind of like an interesting hire out of Uniswap. Like, it's obviously something totally different than the Uniswap exchange. David Phelps, I know who runs jokerace, his take was that it's just very obvious that user endpoints, like, user experiences is one of the most valuable places to be.

And so what Uniswap is really doing is finding, like, where an app that users will use and just having that be a part of your brand. So whether it's about the Uniswap Amm or not, that's kind of the play there. Yeah, I mean, I totally agree with that. I think that we need more on chain experiences that don't have to do with pure speculation. You could argue that some of this is speculation.

Anthony Cesano
As you mentioned, there is a prize pool, so people, people are speculating on that. But there is a huge social aspect to it. And I think that the social experiences are probably some of the most important and underexplored within crypto. So if we can get more of these things where they mix that, you know, that financial kind of carrot on a stick with the heavy side being the social side of things, we can get more interesting stuff here. And I think there's been other experiments as well.

Like, you know, far Caster, for example, is a big one, right? Mixing the kind of social side of things with the financial side of things. Things. But I think crypto, the game is unique from, from what I've seen of it and what I've heard about it, in that it definitely feels like survivor on crypto. I don't know if anyone has watched survivor before, but it definitely feels like that.

But in a much more cutthroat way because you can be a non, right? Like, you don't have to dox yourself. And when you're a non, you can do a lot of things that you otherwise wouldn't do if you were doxxed. So it's a very interesting dynamic. Yeah.

David Hoffman
I have been told, and this probably goes for you as well, Anthony, that we would probably not do very well playing the game because we would just be eliminated too fast because. Cause, like, our targets on our back are massive. Like, oh, David from bankless, Anthony from the daily way. Get them out of here. Like, vote them off the island.

Like, they can't be here. But we could join as an anon, right? Like, we could join as an anon. But I've also heard that if you join as an anon, you need to, like, make up a backstory. So if you come in as a pure anon, that is also a target on your back.

So you need to be, like. You need to be, like, more than anon, but not, like, you know, crypto famous. Like, somewhere, right, in that media, you. Can'T be GCR because everyone knows who you are, right? Like, even as an anon, too famous of an a nine.

Anthony Cesano
So you'll probably be eliminated as well. I heard this one story of a guy or girl was playing crypto the game, and they're in telegram. You're squatted up with four or five people or something, and then your squad kind of, like, rotates as the game goes. But some guy went on a run, and so he was gone from an hour, and so his team needed to vote someone off. He's like, this guy is not taking this seriously.

David Hoffman
We have to vote this guy off. Cause he went on a run. Oh, man. Yeah, definitely lose this within, like, the first five minutes. Like, sorry, guys, I got to take a break.

Anthony Cesano
Taking a break. How dare you? You're off the island. Get him out of here. Oh, that's great.

That's great. Anyways, season three is coming, of course. So this is going to be the first season where Uniswap is the operator of crypto the game. I did an interview with Daniel, so if you want to learn a little bit more about that, that episode is in the bank. Liz archive.

David Hoffman
It's also on Twitter as well. Well, okay, this one's pretty cool. This one's close to my heart. Wu Tang Clan's album, Once Upon a time in Shaolin is turned into an NFT and is going to get released. There is a ton of lore behind the Wu Tang.

One of one album once a time in Shaolin. I don't have enough time to go into it, but basically, Wu Tang album, one of the most famous rap groups of all time made an album that they only made one of, didn't release it. This was in 2014. So, like, pre Spotify era, right? Right.

They made it into one cd and then they sold it for $2 million to Martin Screlley, who had his asset seized because he went to jail for securities fraud. And that was put up to auction by the us government and was bought by Pleaserdao. And the album is not allowed to be released until the year 2102. But I think we're going to do an episode with the pleaserdao. And they are actually accelerating the release date for every fraction NFT that is bought.

So if you buy one fractional NFT, you will move up the release date of the one of one Wu Tang album by 88 seconds. 88 seconds. So you bump it up. And so if once enough of these things are bought, then the actual album will be released and you all owners of the very cheap nfts will be able to listen to it. These nfts are being issued on base.

I think it's a cool story. I can't, again, do this story justice in this quick amount of time here, but it's very along the line, the ethos of just like one of one nfts, cultural artifacts, distributing a power to the masses, direct artist to consumer relationships with no middleman. And it's pretty cool to see this coming to NFT format. Any comments here? Anthony, I can safely say this is one thing that I have absolutely no idea about.

Anthony Cesano
Like, I know a lot of things in crypto. I know a lot about a lot of things, but this definitely not because I don't listen to the Wu Tang clan, whatever they're called. It's not my style of music. And I definitely don't pay too much attention to the NFT side of crypto. It's just not something that I'm too interested in.

So, yeah, I'll take your word for it on how interesting of a story this is. But I do like the mechanism of the, you know, buying an NFT, reducing the time until it's released, that's something cool and something pretty uniquely enabled, I think, by crypto are. Yeah. So there have been 5800 unique collectors and 145,000 shares of this thing. So one NFT is a share of the album.

David Hoffman
So governance rights over the album. And so if you want to take part in that and help release this thing, I've actually listened to this Ucu. There are, like, semi frequent listening parties. Album four, or, excuse me, song four is my favorite song. I couldn't tell you what the name of it is because I don't think there are names, but yeah.

Cool. Anyways, moving on. Terraform labs. Do Quan agreed to pay the SEC a confirmed $4.5 billion in a civil fraud case. I did not know that Terraform Labs had $4.5 billion, but when the headline out of Coindesk says, agree to pay the SEC a confirmed $4.5 billion, that tells me that there's $4.5 billion somewhere.

And that makes me say in, like, WTF, bro? Like, where did that $4.5 billion comes from? And why does the SEC get to get as a fine? There are plenty of people who had, like, money get literally burned on fire. Maybe they should get the money.

What are your, what are your thoughts and sentiments here, Anthony? I mean, I completely agree with you. I think that the fact that they have that much money to begin with is a shock to many people. I'm not sure where it would have come from, if anywhere. Maybe it came from that BTC that they were stockpiling in order to try and kind of use it as collateral to prop up their stable coin.

Anthony Cesano
Uh, maybe it came from there. I'm not sure. I don't even know if it's detailed in the case of where this money actually came from. But I agree with you. It should not be going to the SEC mafia as protection money, really.

Right. It should be going to some of the victim. Like, it'd be kind of difficult to know who to give it to, I guess. But I think that there are a lot of different victims here, and just giving it to them in any capacity is way better than giving it to the SEC, because giving anything to the government, I mean, they're going to just spend it inefficiently to begin with, and no one is really protected here. Like, the SEC's mandate is to protect investors and to help them and make them whole when they can.

If they just keep this money for themselves, they haven't made anyone whole. They haven't helped anyone. Yes. Do Kwon and some of the other terraform kind of people, labs people, got their comeuppance, which is great. Like, I do enjoy that.

I do enjoy seeing Do Kwon get punished for his, you know, his stupidity and his crimes. Uh, but at the same time, I don't enjoy the. The $4.4 billion. $4.5 billion. That is going to the SEC instead of going to the people who are actually hurt.

Like, what are we doing here? Are we just inflating the SEC's kind of coffers? Yes. And that's not the way it should be. Yeah, absolutely nuts.

David Hoffman
Like, if you just did a random airdrop of, like, USDC onto, like, addresses, cosmos addresses that had Luna at the time of the collapse, like, sure. Not a perfect way of, of reparations, but, like, way better than, like, giving it to the SEC. But the SEC has proven itself to be not really in the interests of people, very much in the interests of himself. One cool release this week comes out of Alchemy. Alchemy is an RPC provider, quite like infuria, one of the biggest ones.

And they are introducing rollups. They want you to issue a roll up issue, deploy a roll up. So kind of like a conduit in the roll up. As a service provider, this is the roll up as a service category. They are becoming a place to deploy rollups.

If you want to build, launch, scale your layer two. Alchemy now has a roll up distribution platform. Hosting platform. Yeah, hosting platform. That's the right word for it.

Pretty cool. I'm not calling it a pivot because I'm sure they're definitely doing their RPC stuff too, but it's an adjacent vertical that they are heavily leaning into. So pretty cool announcement out of alchemy. Yeah, definitely. And just continues the trend of the modularization of Ethereum.

Anthony Cesano
Right, where everyone gets to basically build on this stack, build in a modular way, and that opens it up to a cambrian explosion of innovation and of product offerings. There's not just like one kind of company or one thing that offers those products. It's a multitude of different entities that offer these products in different ways. And the market, the free market, chooses what they want to use and choose what they don't want to use, which I think is very, very bullish. Right, totally.

David Hoffman
And then raises of the week, we had a gargantuan raise. Paradigm has announced their third fund, $850 million venture fund focusing on crypto projects. At the earliest stage, of course, they had to actually add in crypto there because of that one moment where they actually, they took crypto off the website and everyone took that extremely personally. So congratulations to Matt Huang and the entire paradigm team. $850 million is nothing to scott off at.

And of course, paradigm is like one of the most revered, well respected, technically strong VC funds in crypto. Any thoughts or additional comments? No. I mean, no real thoughts, not surprised at all by this. As you mentioned, like paradigms big already and being big begets being bigger in venture.

Anthony Cesano
Especially if like you get money in from LP's that are basically like, oh my God, like there's so much going on in crypto right now, I need exposure to it. Who do I go with? I'm going to go with one of the most respected and, and, you know, well performing funds, which is, which is paradigm, definitely. I think they're definitely up there. Uh, they have made some, I guess, maybe confusing investments over the past couple of years, uh, that people may have looked at.

But at the same time, if you just follow VC incentives generally, uh, that's what it kind of points to. It's like when you have that much money to deploy, you kind of need to find projects to deploy it to. There's not actually enough quality projects out there to fill billions of dollars of vc money. Like that doesn't exist. So you need to be going to maybe more riskier project, maybe projects you otherwise wouldn't have funded and so on and so forth.

David Hoffman
Yeah, you can definitely invest faster than we can build quality projects. And that's true across the entire crypto VC space. Anthony, I want to thank you so much for subbing in for Ryan, who's taking a well earned break. If people just loved the sound of your voice and they want to hear more of it, where should they go? They should go to the Daily Gwei on YouTube or just go to my Twitter profile and you can find all the relevant links there.

Anthony Cesano
And I've also restarted doing a episodes of the into the ether podcast for the ogs that remember that podcast with Eric Connor every week now as well. So yeah, people can go follow both of those things if they want to, but the Daily way is just me. You know, every day, almost every weekday, I tried to make those episodes happen, talking about Ethereum, giving the latest updates there, specifically with a heavy focus on Ethereum core protocol and layer two. So if people are very interested in that, then yeah, feel free to follow the show. Yeah, bankless listeners will who are familiar with Anthony will know.

David Hoffman
We bring him on quite frequently because he does a bang up job covering Ethereum. Very deep, very technically bankless. Like 100 level, 200 level, 300 level, daily gwei, 300 level 400 level, very deep Ethereum. And definitely something I have straight into my ears every single morning when I wake up and I get sassle's daily Gwei podcast right into my ear. So thank you for doing what you do, my brother.

Anthony Cesano
Thank you for having me on. It's been a joy. And, yeah, I look forward to next time. Absolutely. Banklessation.

David Hoffman
You guys know the deal. Crypto is risky. You can lose what you put in. But, hey, we're headed west. This is the frontier.

It's not for everyone. But we are glad you are with us on the bankless journey. Thanks a lot.