Podcast Summary
Worldcoin Project Divides Crypto Community: The Worldcoin Project went live on the mainnet, causing excitement and controversy within the crypto community. Bitcoin and Ethereum prices remained stable, while the Nasdaq reached new highs. Listeners were introduced to Stater, a new liquid staking protocol.
The crypto community is divided in its reaction to the Worldcoin Project, which recently went live on the mainnet. While some are excited about it, others are expressing hatred towards it. In the latest episode of the Bankless Friday weekly roll up, the hosts discussed various aspects of the Worldcoin launch and their involvement in it. They also touched upon other topics such as crypto bills in the House and Senate, Elon Musk's plans for Twitter, and the current state of the market. The market section revealed that both Bitcoin and Ethereum experienced minimal price changes, with Bitcoin losing 1.6% and Ethereum 1% over the week. In contrast, the Nasdaq continued to rise towards all-time highs. The hosts also mentioned Stater, a new liquid staking protocol with a low capital requirement for running a node, and encouraged listeners to check it out if it seemed right for them.
Fed Raises Rates, No Imminent Recession Forecast: The Fed raised interest rates but doesn't foresee an immediate recession, causing market uncertainty and volatility despite strong economic data and all-time high stocks.
Despite the Federal Reserve raising interest rates to their highest level in 22 years, there is currently no forecast for an imminent recession. Powell stated that it's possible for the Fed to raise rates again in September, but also possible for them to hold steady. Inflation seems to be moderating, and the Fed staff no longer forecasts a recession. However, the lack of clear communication from the Fed has caused uncertainty and volatility in the markets, with stocks near all-time highs despite the higher interest rates. The contrast between the economic data and the stock market performance has left some macro analysts questioning the sustainability of the current market conditions.
Long-term investors continue to accumulate high conviction assets: Investors should focus on accumulating high conviction assets like Bitcoin and Ethereum, even during market uncertainty and volatility, for potential significant returns in the long run. Holding through market downturns and not selling during times of fear is crucial.
Despite the economic uncertainty and market volatility, long-term investors in high conviction assets like Bitcoin and Ethereum are continuing to accumulate, and this trend has historically led to significant returns on investment. The speaker emphasizes the importance of holding through market downturns and not selling during times of fear. The market is currently in an accumulation phase, as evidenced by the increase in Bitcoin long-term holder supply, and those who sell now will likely be the losers on the other side of the market. The speaker also mentions the ongoing layer 2 wars between different scaling solutions for Ethereum, with Optimism recently surpassing Arbitrum in daily transactions for the first time. Overall, the speaker encourages a long-term perspective and a focus on accumulating high conviction assets, rather than trying to time the market or sell during periods of volatility.
Competition between Arbitrum and Optimism for Ethereum layer 2 dominance: Arbitrum leads with 57% of layer 2 assets, but Optimism rapidly gains ground with 27%, indicating positive competition for Ethereum scalability and fee reduction.
The competition between different layer 2 scaling solutions on Ethereum, specifically Arbitrum and Optimism, continues to intensify. While Arbitrum currently leads with 57% of the total layer 2 assets, Optimism is rapidly gaining ground with 27%. This competition is a positive sign for the Ethereum ecosystem and the modular blockchain thesis, as both solutions aim to improve scalability and reduce transaction fees. However, it's important to note that both Arbitrum and Optimism are still in their early stages of decentralization, with Arbitrum at stage 1 and Optimism at stage 0. As these projects continue to develop and compete, it will be interesting to see which one outpaces the other and how the decentralization levels progress. Additionally, the layer 2 sector as a whole is experiencing significant growth, with over $10 billion in assets and increasing activity, indicating that the bull run for layer 2 solutions is yet to come.
Polygon 2.0's zk innovations and Worldcoin's unique concept go live on mainnet: Polygon 2.0 introduces unlimited scalability and unified liquidity with zk tech, while Worldcoin distributes tokens as UBI in response to AI-induced job loss through unique humanness verification
Polygon 2.0, with its zk innovations like Polygon zk EVM and zk powered interoperability layer, aims to offer unlimited scalability and unified liquidity to users and developers. Meanwhile, the Worldcoin project, a proof of humanity system using biometric scanning, has recently gone live on mainnet, with a fully diluted valuation of $21 billion. The project, founded by Sam Altman, is designed to ensure unique humanness verification and distribute a token equally among all humans as a UBI attempt in response to potential job loss due to AI advancements. The launch has seen massive lines of people getting verified, with each person receiving 25 World Coins initially and one World Coin per week thereafter. Despite the controversy surrounding the project, Polygon's advancements in zk technology and the potential of Worldcoin's unique concept continue to garner attention.
Worldcoin's Inflated Market Cap and Challenges: Worldcoin's $21B fully diluted market cap is inflated due to its reliance on Optimistic Rollups and the complex biometric proof of personhood system, which faces challenges in accessibility, scalability, and decentralization.
While Worldcoin's WLD token currently has a circulating market cap of $239 million, its fully diluted market cap is an inflated $21 billion. This massive discrepancy places Worldcoin among the top 7 cryptocurrencies by market cap, surpassing Lido staked ETH. However, this valuation comes with significant risks, as the project is not a layer 1 and relies on Optimistic Rollups. Additionally, Worldcoin's biometric proof of personhood system, which uses eyeball-based verification to maintain privacy, is a complex and ambitious undertaking. Vitalik Buterin, a prominent figure in the crypto community, has expressed concerns about the system's vulnerabilities and the challenges it faces in terms of accessibility, scalability, and decentralization. Overall, while Worldcoin's potential as a decentralized proof of personhood solution is intriguing, its success will depend on the project's ability to address these challenges and deliver on its ambitious goals.
Risks and controversies of relying on a single solution for complex issues like decentralization, security, and decentralized identification: Critics argue against relying solely on Worldcoin's biometric proof of personhood due to potential exploitation, black markets, and dystopian outcomes, emphasizing the need for multiple solutions and approaches.
Relying on a single solution for complex issues like decentralization, security, and decentralized identification, such as Worldcoin and its biometric proof of personhood, comes with risks and controversies. Critics argue that Worldcoin has its own implementation issues, like exploitation of people, black market for accounts, and malicious orbs. Furthermore, there are broader concerns about biometric proof of personhood as a whole, which some believe could lead to dystopian outcomes due to potential misuse of the technology and lack of recourse for people if things go wrong. It's essential to consider multiple solutions and approaches to address these complex issues, rather than putting all our eggs in one basket.
On-Chain Personhood: Debating Methods and Implications: The crypto community is exploring various methods for on-chain identity verification, from biometric to social graph-based approaches. The debate revolves around scalability, privacy, and control, with some arguing true decentralization is impossible.
The crypto community is grappling with the concept of on-chain personhood and the potential implications of various methods for verifying identity. The current state is nation-based, but it can be problematic if a government becomes authoritarian. Biometric methods face criticism for potential corporate control and the need for hardware. Social graph-based approaches are decentralized and popular, but some argue they're not scalable. A controversial viewpoint was expressed by Nick from ENS, who believes truly decentralized, trustless proof of humanity is impossible and we should focus on building systems that don't assume individuals are unique humans. Bankless featured Worldcoin on their podcast due to its massive scale and attention, and Sam Altman's involvement. The discussion highlighted the complexities and debates surrounding the implementation of on-chain personhood and its potential impact on privacy and control.
Interview with Sam Altman about World Coin: Instead of giving up on decentralized proof of personhood, the crypto community should channel its energy into building alternative solutions.
The World Coin project, which aims to create a decentralized proof of personhood, is a legitimate area of exploration within the crypto space. However, during an interview with Sam Altman about the project, the interviewer could have been more critical and pushed back on some aspects of the project. The interview was intended as a conversation starter, with further episodes planned to explore different perspectives on World Coin. The interviewer also clarified that Bankless, the organization behind the podcast, has never taken money for content. The controversy surrounding World Coin has sparked anger in the crypto community, with some valid criticisms and others that are uninformed. The takeaway is that instead of giving up on the idea of decentralized proof of personhood, the community should channel its energy into building alternative solutions. The crypto community is known for building, and this is an opportunity to create a decentralized solution for identity that doesn't rely on states or traditional financial institutions.
Speaker's thoughts on Worldcoin's potential and concerns: Speaker is cautious about Worldcoin's value proposition and implementation, but supports the broader conversation in decentralized identity space. US crypto policy shows progress with new bills.
While the speaker expresses an openness to the potential of Worldcoin as a technology for decentralized proof of personhood, they remain cautious and undecided due to concerns about its implementation and value proposition. The speaker questions the value of the Worldcoin token, which they see as largely dependent on human perception and legitimacy, and points out the lack of clear value accrual mechanisms. However, they express support for the broader conversation and competition in the decentralized identity space. Additionally, they highlight some positive developments in US crypto policy with the passing of bills aimed at providing clarity for digital asset issuance and trading.
House and Senate propose crypto regulations: The House introduced a bill to clarify crypto as not securities, while the Senate proposed stricter surveillance for DeFi protocols, both receiving bipartisan support but sparking debate within the crypto community
The crypto industry faced two significant regulatory proposals this week, with one coming from the House of Representatives and the other from the Senate. The bill from the House, introduced by Tom Emmer, aimed to provide clarity to the crypto industry by defining digital assets as not securities. This bill received bipartisan support, with 35 members voting in favor and 16 against. On the other hand, the Senate proposed the Crypto Asset National Security Enhancement Act of 2023, which mandates that DeFi protocols and their controllers impose bank-like surveillance on their users, requiring them to vet and collect information, report suspicious activity, and block sanctioned users. This bill also received bipartisan support but raised concerns among the crypto community, as it could potentially hinder permissionless global computing in the US. Overall, these regulatory proposals highlight the ongoing efforts to regulate the crypto industry, with some advocating for clarity and others for stricter surveillance.
Bringing order to the chaotic crypto world: The 'law of chains' concept aims to unify various crypto chains under one super chain, simplifying management for users and offering collective bargaining power.
The crypto industry is constantly evolving, with new technologies and projects emerging frequently. However, keeping track of all these new developments can be overwhelming for users. To address this issue, the concept of the "law of chains" has been proposed, which aims to bring all these different chains under one super chain by setting a threshold of quality assurances. This will enable easier management for users and provide collective bargaining power for the included chains. For instance, MetaMask Portfolio simplifies managing crypto assets across multiple chains and addresses, while Arbitrum's suite of Ethereum scaling solutions offers faster transaction speeds and lower gas fees. These developments are crucial in making DeFi and NFTs more accessible and user-friendly. Additionally, MetaMask and Arbitrum are sponsors that support the crypto ecosystem by providing essential tools and infrastructure.
Joining forces: The law of chains and interconnected blockchains: The law of chains is a new concept for uniting various blockchains, led by Optimism, with debates ongoing over centralized governance vs decentralized math protection, and Layer 2 solutions like Optimistic Rollups and zk-Rollups competing, forming stack-based ecosystems.
The "law of chains" is an emerging concept in the blockchain space, which proposes a set of standards for joining a confederacy of interconnected chains. This process involves establishing a formal body to vote on which chains meet the threshold and can be adopted into the confederacy. Optimism, a team behind several Ethereum Layer 2 projects, is currently leading the way with multiple chains under their umbrella. The debate between centralized governance and decentralized math and code protection is ongoing, with some preferring the individualism and sovereignty offered by zk-rollups. The race between Layer 2 solutions like Optimistic Rollups and zk-Rollups is heating up, with both having their unique advantages. The first inning of this game has just begun, and it's exciting to see how it will unfold. The convergence of Layer 2 solutions into stack-based ecosystems, where a general-purpose EVM chain is accompanied by app chains, is a significant development in the infrastructure side of crypto. With teams like Optimism, zkSync, and StarkNet leading the charge, it's an intriguing time to be involved in the crypto space.
Twitter Rebrands as 'x': A New Super App by Elon Musk: Elon Musk rebranded Twitter as 'x', aiming to create a super app, causing confusion and uncertainty over identity, branding, and handle ownership. Users must acknowledge the shift to a private platform or seek alternatives.
Elon Musk has rebranded Twitter into "x," a new platform aiming to be a super app. This isn't Musk's first venture with the "x" name, as his early startup x.com, which was an online bank, holds a similar moniker. The rebrand has sparked confusion, as the platform's identity and branding, including the blue bird logo and tweets, have been replaced with the "x" logo and "Zeets." Users' handle ownership is also uncertain, as seen in a recent incident where Elon took away a user's Twitter handle and transferred it to "x." The broader implication is that Twitter, now "x," is no longer an open public square but a private application owned by Elon Musk. Users must acknowledge this shift and decide whether to continue using the platform or seek alternatives. The transition to a super app and potential incorporation of crypto remains to be seen.
Notable figures join Bitcoin, DeFi evolves, and user experience improves: Bitcoin gains notable figures, DeFi upgrades, and user experience is prioritized with new technologies and features like subscriptions for streaming payments.
The crypto industry continues to evolve, with notable figures like RFK Junior joining the Bitcoin community, and established companies like CoinDesk potentially changing hands. The user experience remains a key focus for projects looking to compete with centralized platforms, and DeFi 1.0 is seen as upgrading to 2.9 in the background. Notable developments include Synthetics releasing a more user-friendly layer, Infinix, and Superfluid introducing subscriptions for streaming payments. Despite the challenges of the past, there's a sense of optimism in the DeFi space, with record usage and the promise of new technologies on the horizon.
Chainlink's New Cross-Chain Interoperability Protocol CCIP: Chainlink's new CCIP protocol aims to connect various blockchain networks as a 'super bridge', starting with cross-chain messaging and expanding to collateral deposits, NFTs, gaming, data storage, and computation. Chainlink has raised over $60 million and achieved unicorn status.
Chainlink is working on a new cross-chain interoperability protocol called CCIP, which can be seen as a "super bridge" connecting various blockchain networks. This protocol starts with cross-chain messaging and can be built upon for various use cases like cross-chain collateral deposits, NFTs, gaming, data storage, and computation. The CCIP protocol is similar to what Layer 0 is doing but with a Chainlink twist. Although the speaker has reservations about bridges in general, they acknowledge Chainlink's strong technology and its potential to support multiple chains underneath, such as Avalanche and Ethereum. Chainlink has recently raised over $60 million and achieved unicorn status. Additionally, there's ongoing conversation about Suave, a new MEV chain that functions as a marketplace for block builders and searchers. The speaker plans to discuss these topics further in upcoming episodes. Sponsored by Mantle, a DAO-led web 3 ecosystem, and TOKU, the first employment and compensation platform for the crypto industry.
TOKU streamlines global hiring and compliant payments for companies: TOKU simplifies global hiring and compliant payments for companies in 100+ jurisdictions, partnering with Ethereum-focused entities like Protocol Labs, Hedera, and Gitcoin.
TOKU simplifies the process of hiring employees or contractors and making compliant payments in both fiat and crypto across over 100 jurisdictions. This solution caters to companies of all sizes, from early-stage teams to enterprises. TOKU's partnerships with leading companies in the space, such as Protocol Labs, Hedera, and Gitcoin, demonstrate its effectiveness. Another significant discussion revolved around Eigenlayer's role in enhancing the overall security of the blockchain ecosystem by enabling Ethereum's security to cross borders into other layer ones. This idea was compared to the US dollar serving as a global reserve currency. Ether's status as a proof-of-stake, smart contract platform with significant economic bandwidth makes it the best choice for securing other networks. This could lead to ether becoming the reserve currency of crypto and other blockchains, further solidifying its position. Moreover, market makers are becoming increasingly important as bridges in the crypto space. Instead of making trades on decentralized exchanges and then using bridges, users can now broadcast their intent to make a trade to market makers, who can then execute the trade on the desired chain. This minimizes the need for actual transactions on the Ethereum mainnet, making the process more efficient.
The evolving role of market makers in DeFi: New technologies and protocols are decreasing costs, converging design patterns, and shifting focus towards building consumer-friendly applications and front-ends in DeFi. Excitement surrounds layer 2 solutions, pushing boundaries of innovation and potential for mass adoption.
That the role of market makers in decentralized finance (DeFi) is evolving, allowing for a more efficient and decentralized market. The emergence of new technologies and protocols is leading to a decrease in costs and the convergence of design patterns. This means that the focus is shifting towards building consumer-friendly applications and front-ends for those who are new to the space. Additionally, there's a sense of excitement around the rapidly developing layer 2 solutions, which are pushing the boundaries of innovation. Overall, the theme of the conversation was the importance of permissionless innovation and the potential for mass adoption in the future.
The role of crypto in maintaining trust and democracy amidst social media disruption: Crypto's decentralized, permissionless, private, and unsentorable identity system is crucial for maintaining trust and democracy, separating money and state in Act 1 and identity and state in Act 2.
As the use of social media and bots becomes more prevalent, the potential for them to disrupt democracies and destroy trust increases. The current solution to identify bots from humans is through partnerships between tech companies and governments, but this approach raises concerns. Instead, crypto has the potential to create a decentralized, permissionless, private, and unsentorable stateless identity, which is crucial for maintaining trust and democracy. Crypto's role in separating money and state in Act 1 and identity and state in Act 2 is essential for navigating potential dystopian scenarios. While there are ongoing debates about the best solutions, it's important not to lose sight of the need for decentralized proof of personhood. In other news, Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), jokingly suggested that UFOs need to register, further highlighting the need for clear regulations in the crypto space. As always, none of this should be taken as financial advice.
