Podcast Summary
Solana DEXs Surpass Ethereum DEXs in Usage: Solana's DEX usage surpassed Ethereum's, signaling Solana's growing potential. California laws forced 'Bankless' to change name, causing market crash. Solana meme coins raised over $100M, BlackRock entered crypto, Ethereum Foundation under SEC investigation.
Solana's decentralized exchanges (DEXs) have surpassed Ethereum DEXs in usage for a few days, and this could be a sign of Solana's growing potential. However, the hosts of the "Bankless" podcast had to change their name due to California's laws against using the word "bank" in company names, even though they are not a bank. The market saw a crash, but there were also significant developments such as Solana meme coin presales raising over $100 million and BlackRock entering the crypto space with a token. The Ethereum Foundation is also under investigation by the SEC. Despite the market volatility, the hosts remain optimistic and continue to cover the latest crypto news on their podcast.
Bitcoin price correction caused by shift in trader expectations: A recent Bitcoin price correction was due to traders adjusting their expectations for future flows, but the price is expected to rise again.
The recent sell-off in Bitcoin, which saw the price drop from $71,300 to $66,900, was due to a shift in expectations among traders regarding future flows of the cryptocurrency. This shift led to a decrease in buying and an increase in selling, causing the price to correct. However, this correction is not a cause for concern, as the flows will eventually pick back up and the price is expected to rise again. Additionally, Bankless citizens receive exclusive benefits such as debriefs, extra episodes, and discounts to events. To become a citizen, listeners can use the link in the show notes or through Spotify.
Healthy sell-offs in Bitcoin and Ethereum: Despite recent severe sell-offs in Bitcoin and Ethereum, these are healthy signs as they flushed out leverage and instilled fear, necessary for continued growth. Bitcoin's 17% drop from peak to trough is extremely bullish compared to historical averages, while Ethereum's price sensitivity could lead to a significant move with an ETF approval.
Markets experience regular sell-offs, even in bull markets, and the recent sell-off in Bitcoin and Ethereum, though severe, is a healthy sign. Jesse Ectal described it as a bullish sell off that flushed out leverage and instilled fear, which is necessary for continued growth. Bitcoin, the biggest mover in the market, only saw a 17% drop from peak to trough, which is extremely bullish given the historical average of 30%. Ethereum, on the other hand, showed some volatility but not significant bearish price action, with its ratio to Bitcoin at 0.052. The market's focus on Bitcoin and meme coins has left Ethereum waiting its turn, but the approval of an Ethereum ETF could trigger a gargantuan movement due to Ethereum's price sensitivity. The market's current state of accepting inflows from TradFi and the uncertainty surrounding the ETF approval have traders focusing on meme coins for now. Overall, these sell-offs are a normal part of the market cycle and should be expected.
Solana's Market Cap All-Time High: A Significant Metric for Network's Growth: Solana's market cap hit a new all-time high in March 2024, surpassing Ethereum in trading volume and attracting retail investors. Impressive fee revenue from meme coin trading and low fees contribute to network's popularity and potential long-term value.
Solana's market cap all-time high is a significant metric to consider, as it represents the total value of the network and includes inflation, increased supply, and dilution. Solana's market cap hit a new all-time high in March 2024, surpassing Ethereum in 24-hour trading volume and attracting a large influx of retail investors. Solana's popularity has been on the rise, with search engine traffic and new addresses both spiking. The network's transaction fees have also been impressive, with Solana surpassing Bitcoin's fee revenue for the first time in March 2024. This trend is expected to continue as more users and projects migrate to the Solana network. Additionally, Solana's wallet, Phantom, briefly surpassed MetaMask in the App Store. Another notable development is that Solana is selling blocks, with fee revenue registering at almost $20 million in the past week. This impressive feat is due to the high volume of meme coin trading on the network and the relatively low transaction fees. Overall, Solana's market cap all-time high and impressive fee revenue are strong indicators of the network's growing popularity and potential long-term value.
Solana's High Transaction Congestion and the Need for Congestion Pricing: Solana's popularity and economic ecosystem dynamics have led to high transaction congestion, necessitating congestion pricing. MEV bots, not meme coin traders, are primarily paying the fees.
The Solana blockchain network is currently experiencing high transaction congestion due to the increased demand from users and MEV bots trying to capture slippage. This congestion has led to the need for congestion pricing or contention pricing to ensure transactions are processed first. The fees are not necessarily being paid by meme coin traders, but by MEV bots. Despite the current issues, Solana's success and rapid recovery from downturns have surprised many, including the speaker, who admits to underestimating its potential in the past. The network's innovative features, such as VM parallelization and user-friendly UX, have contributed to its growth. However, the high transaction fail rate, currently at 70%, is a significant issue, causing frustration for users and leading to spam transactions. The networking problem is due to the low fees and the high volume of conflicting transactions. Overall, Solana's current state is a result of its growing popularity and the economic dynamics of its ecosystem.
Meme coin mania on Solana leads to increased transaction failures: The popularity of meme coins on Solana has resulted in a surge of failed transactions due to manual distribution processes and high demand, increasing risks for investors
The Solana blockchain has seen a significant increase in failed transactions, especially after Jido stopped managing the mempool. This issue has been exacerbated by the popularity of meme coins and their presales, which have seen over $100 million in Solana sent within a 48-hour window. Unlike the ICO era, these meme coin presales do not involve smart contracts, but rather manual token distribution. The demand for meme coins is high due to the potential for quick profits, with some coins skyrocketing in value in a short period. The meme coin creators require liquidity instead of capital upfront, which is provided by investors who buy LP tokens. This setup allows for immediate liquidity and potential profit upon launch. However, there have been instances of accidental losses, such as $10 million being sent to the wrong address. The lack of a smart contract and the manual distribution process increase the risk for investors.
Meme coin presales: Unpredictable and risky: Investing in meme coins, especially during presales, involves risks and potential for both gains and losses. Be aware and cautious, as mistakes can have serious consequences.
The crypto market, specifically the meme coin sector, can be unpredictable and risky, with potential for both significant gains and losses. This was highlighted in a notable incident involving the Slurf meme coin presale, where the creator accidentally burned the LP tokens meant for the airdrop. This mistake led to a report being made to the FBI, showcasing the seriousness of such incidents. Despite the risks, some individuals continue to engage in meme coin presales, often driven by the excitement and potential for profits. It's important to remember that every generation of crypto investors must learn from their own experiences and mistakes, as the market evolves and matures. Solana, a relatively young blockchain, is still in its toddler years and experiencing significant growth. However, as with any investment, it's crucial to approach with caution and be aware of the potential risks.
Significant Role of Blobs in Ethereum Ecosystem: Blobs enable affordable transactions on Ethereum layer 2 solutions, leading to a mass migration and record-breaking TVL.
Blobs, which are binary large objects, play a significant role in the Ethereum ecosystem. They are essentially padded data that allows transactions to meet the minimum size requirement for the Ethereum network. Transactions on layer 2 solutions like Optimism and Arbitrum, which consume blobs, are almost free. This has led to a massive migration of assets and users from Ethereum layer 1 to layer 2, resulting in all-time highs in TVL (Total Value Locked) on layer 2 platforms. The trend of moving from expensive Ethereum layer 1 to more affordable layer 2 solutions is expected to continue throughout the current market cycle. Additionally, the focus is shifting towards decentralizing zkSync to the community to further enhance the decentralization of these layer 2 solutions.
Expanding Ethereum User Base, Institutions Join, and Crypto Tax Season: Ethereum's user base grows, institutions join, fees remain high, crypto tax season arrives, and Celo aims to become a layer 2 on Ethereum for lower fees and benefits
Ethereum's user base is expanding rapidly, with many new users bypassing the Ethereum mainnet (Layer 1) and going directly to decentralized exchanges and wallets. This trend is expected to continue for the next year, as transaction fees on Layer 1 remain high. Meanwhile, institutions like BlackRock are increasing their presence on Ethereum through compliant on-chain activities. The Ethereum Foundation is also under investigation. Crypto tax season is upon us, and crypto tax calculator can help simplify the process by automating tax calculations for various cryptocurrencies and integrations. Celo, a mobile-first, carbon-negative blockchain, is looking to become a layer 2 on Ethereum to bring advantages like low gas fees and the ability to pay for gas with ERC-20 tokens. The competition for building the Celo layer 2 is fierce due to its potential benefits. The Federal Reserve is also being watched closely for its impact on the economy and the crypto market.
Fed Signals Hold on Interest Rates, Inflation Temporary: The Fed held rates steady, signaled three cuts for 2019, and viewed recent inflation as temporary. BlackRock launched a tokenized fund, marking traditional finance's entry into crypto.
The Federal Reserve (Fed) led by Jerome Powell, signaled a hold on interest rates during their latest FOMC meeting, with forecasts suggesting three rate cuts for the year. Powell also expressed that recent inflation, which has been above 3%, is just a temporary uptick and is gradually moving down towards the Fed's 2% target. The markets reacted positively to this news as it was considered as expected and not hawkish. Additionally, there were discussions about stopping quantitative tightening, which could potentially lead to more liquidity and even QE. However, the direction of inflation will be a significant factor in determining the Fed's next moves. Meanwhile, BlackRock, the world's largest asset manager, made headlines by launching its first tokenized fund on the Ethereum network, marking a significant step for the traditional financial industry into the crypto world. This move shows that even institutional players are recognizing the potential of blockchain technology and digital assets.
BlackRock enters Ethereum with tokenized treasury product: BlackRock, the world's largest asset manager, launched a tokenized treasury product, BIDL, on Ethereum, marking a significant step towards institutional adoption of blockchain technology. With a minimum investment of $5M, it pays monthly dividends based on treasury yields and functions as a stablecoin worth $1.
BlackRock, the world's largest asset manager, has entered the Ethereum blockchain by launching a tokenized treasury product, BIDL, which is an ERC-20 token with a whitelist for accredited investors, requiring a minimum investment of $5,000,000. This token functions as a stablecoin worth $1 but pays monthly dividends to investors based on the yield from treasuries. It's a significant step towards tokenizing off-chain securities and marks the beginning of large-scale institutional adoption of blockchain technology. BlackRock's $100,000,000 investment is a sign of the industry's long-awaited transition to tokenization. The potential growth of this token could lead to thousands of investors receiving dividends on the Ethereum layer, making BlackRock a significant Ethereum network participant and ETH consumer. Additionally, people have been sending meme coins and other assets to BlackRock's smart contract address, making them a holder of various crypto assets, including Shiba Inu and even a crypto dickbutt. This event underscores the open and permissionless nature of the blockchain ecosystem.
Regulatory Uncertainties Surrounding Ethereum and Cryptocurrencies: Major financial institutions like BlackRock face regulatory scrutiny, Ethereum Foundation under SEC investigation, but experts believe these are normal in crypto industry, clear regulatory guidance is lacking, seek legal advice as regulatory landscape evolves.
There are ongoing investigations and regulatory uncertainties surrounding Ethereum and cryptocurrencies as a whole. BlackRock, a major financial institution, has run afoul of OFAC sanctions, leading to speculation about the regulatory status of cryptocurrencies. Meanwhile, the Ethereum Foundation is reportedly under investigation by the SEC for potential securities law violations. Despite these developments, some experts believe that these investigations are par for the course in the crypto industry and that the fundamentals of Ethereum remain strong. However, the lack of clear regulatory guidance continues to create uncertainty and potential risks for those involved in the crypto space. It's important for individuals and institutions to stay informed and seek guidance from legal experts as the regulatory landscape evolves.
Ethereum Recognized as a Commodity by Regulators: Ethereum's commodity status is confirmed by the SEC through the approval of futures and ETFs, and ongoing debates about its security status are considered misguided
Ethereum (ETH) has been widely recognized as a commodity by various regulatory bodies and marketplaces, including the SEC, since at least 2017. The SEC's stance on ETH as a commodity was reaffirmed when they allowed ETH futures and ETFs to trade on regulated exchanges. The ongoing debate about ETH's status as a security is considered misguided, as evidenced by the approval of Ethereum futures ETFs and the recent inclusion of staking options in ETH ETF filings. While the SEC is currently reviewing Ethereum ETF applications, there is no indication that they are trying to reclassify Ethereum as a security. The ongoing speculation and debates about ETH's regulatory status can lead to unnecessary confusion and market volatility.
SEC Delays Ethereum ETF Decision, Mantle Offers Grants, Uniswap Introduces New Features, Judge Accuses SEC of Bad Faith, First LRT Airdrop, CZ's Moves: SEC delays Ethereum ETF approval, Mantle grants for network expansion, Uniswap's limit orders and sidebar extension, Judge's accusation against SEC, First LRT airdrop, CZ's recent crypto moves
The Ethereum ETFs are expected to be denied by the SEC on May 23rd due to lack of engagement between the SEC and issuers on Ethereum specifics. Some speculate that this is because the Bitcoin ETF has already been approved and the Ethereum ETFs are seen as carbon copies. However, there is still a chance for approval later in the year. Meanwhile, Mantle, a layer 2 Ethereum ecosystem, is offering grants to projects that help expand and decentralize their network. Uniswap, on the other hand, has introduced new features to their web app including limit orders and a sidebar extension, making swapping smarter and more convenient for users. Despite these developments, a judge has accused the SEC of acting in bad faith regarding crypto regulations. Stay tuned for more updates on these stories and more. Additionally, the first Liquid Restaking Token (LRT) airdrop in the eigenlayer ecosystem has dropped with a valuation of $3 billion. This could be a sign of things to come for future LRT token drops. CZ, the CEO of Binance, is also making moves in the crypto space. Lastly, the conversation would not be complete without mentioning the fantastic sponsors that make this show possible, including Mantle and Uniswap. Check out their websites and follow them on social media for more information.
Managing token grants in new projects with international teams can be complex. Tools like TOKU simplify the process.: Tools like TOKU help manage token distributions and handle tax withholdings in real time, simplifying complex token grant processes for international teams.
Managing token grants, especially for a new project with international team members, can be a complex legal and tax challenge. However, tools like TOKU can simplify the process by providing effective oversight of token distributions and handling tax withholdings in real time. For example, EtherFi, a new DAO, recently launched with an airdrop worth over $4 billion. While the total supply of their token is impressive, the eligibility and claiming process were restricted to certain locations due to regulatory compliance. As more liquid restaking tokens (LRTs) are expected to drop, it's essential for individuals and teams to stay informed and use reliable tools to navigate the complexities of token management. Additionally, early adoption and active engagement with projects, such as listening to podcasts like Bankless, can lead to valuable opportunities like airdrops.
Average 'bankless' community member gains $4,500 from EtherFi airdrop: The average member of the 'bankless' community benefited from a $4,500 EtherFi airdrop and the NFT market is seeing a resurgence, but the SEC's actions have raised concerns and criticism.
The average individual who is part of the "bankless" community received significant financial gains from the EtherFi airdrop, estimated to be around $4,500 worth of tokens. EtherFi is not just a token, but also offers three other products: Stake, Liquid, and Cash, which is a layer 2 solution for payments. The NFT market, specifically CryptoPunk sales, is experiencing a resurgence, with high-value sales occurring frequently. However, a recent court case involving the SEC and a crypto firm called Debtbox has raised concerns about the SEC's actions and potential misconduct in the industry. The judge in the case found that the SEC had engaged in bad faith conduct and ordered them to pay the legal fees of Debtbox. This incident has led some crypto lawyers to criticize the SEC and question its trustworthiness. Despite these concerns, Gary Gensler, the chair of the SEC, was still invited to be on the podcast for discussion.
Brainstorming Potential Guests for Gary Gensler Interview: Exploring possibilities of interviewing Bob Gensler and CZ from Binance as potential guests for the Gary Gensler interview slot. Bob is pro-crypto and introduced Gary to crypto. CZ is making waves in education sector with Giggle Academy. Bankless job opening for podcast video editor.
Despite Gary Gensler's unwillingness to join the podcast, the hosts brainstormed potential guests to fill the void, including Bob Gensler and CZ from Binance. Bob, who introduced Gary to crypto, is reportedly pro-crypto and could be a viable alternative. CZ, on the other hand, is making waves in the education sector with his new nonprofit project, Giggle Academy, which aims to redo education using gamified adaptive methods. The hosts also took a moment to encourage listeners to apply for a job opening at Bankless as a podcast video editor. The team is known for being fun and chill, and the position involves editing the podcast and managing social media. The episode ended with a meme of the week featuring a van labeled "presale," which humorously illustrates the risks involved in crypto presales.
Exploring the unknown: Vans and life's adventures: Embracing new experiences and being open to the unknown, even with risks, can lead to growth and discovery.
This conversation hinted at the idea that vans, specifically those parked in certain lots, can represent a sense of adventure and exploration, but also come with risks. This concept was compared to embarking on a journey, specifically the "bonk list" journey, which isn't for everyone but is worth pursuing for those who are up for the challenge. The context suggested that these vans and journeys represent a frontier, a new and unexplored territory. However, there's a risk involved, as one could potentially lose what they put in. Despite this, the speakers seemed glad to be on this journey together. This metaphor can be applied to various aspects of life, from physical travels to personal growth. It reminds us that taking risks and stepping out of our comfort zones can lead to new experiences and discoveries, but it's important to be aware of the potential downsides and to approach the journey with the right mindset. Overall, the conversation emphasized the importance of embracing new experiences and being open to the unknown, even if it comes with risks. It's a reminder that growth and discovery often require taking a leap of faith and trusting that the journey will be worth it.
