Podcast Summary
Merchtember brings merge casts, coffee, and drama to the crypto world: Avalanche uses legal action, Michael Saylor faces a lawsuit, and MakerDAO considers depegging DAI. Ethereum launches a new staking token and upgrades, while Facebook and Instagram expand NFT offerings. Bitcoin drops below 2017 all-time highs.
September, also known as Merchtember, brings merge casts instead of podcasts for the Bankless Nation, and coffee is the preferred beverage for listening to the weekly roll up. The crypto world saw some drama this week with Avalanche using legal systems to compete against other alt layer ones, Michael Saylor being sued for taxes potentially forcing him to sell Bitcoins, and MakerDAO considering depegging DAI. However, there were positive developments too, like a new Ethereum staking token launch and Ethereum upgrading, as well as Facebook and Instagram expanding their NFT offerings. And to commemorate the Ethereum merge, Consensus is offering a free NFT mint for everyone. Bitcoin, on the other hand, experienced a steep drop, starting the week at $21,700 and dropping 9.5 percent to $19,600, falling below 2017 all-time highs.
The merge in Ethereum might occur around Thursday noon UTC, but its exact date is uncertain due to changing hash rate.: The merge from proof of work to proof of stake in Ethereum is approaching, but its exact date is uncertain due to the fluctuating hash rate. The faster the hash rate grows, the sooner the merge will happen, while a drop in hash rate will delay it.
The merge in Ethereum, which is the transition from proof of work to proof of stake consensus mechanism, is approaching, but its exact date is uncertain due to the changing hash rate. The merge predictor website borle.wtf shows that it is likely to occur around Thursday noon UTC time, but this could change depending on the hash rate. The faster the hash rate grows, the sooner the merge will happen. Conversely, if the hash rate drops, the merge will be delayed. Miners might drop off the network as the merge gets closer, making it more profitable for those who stay. The overall cryptocurrency market cap is currently below $1 trillion, and ETH is still floating above its all-time high. The ratio of ETH's market cap to Bitcoin's market cap is down 1.3% on the week. The recent market downturn in both Ethereum and Bitcoin is correlated to Powell's comments at Jackson Hole.
Fed Chair Powell's Inflation Fight Reaffirmed, Markets Suffer: Despite a slight decrease in inflation data, Fed Chair Powell vowed to keep raising interest rates to combat inflation, causing market turmoil. DeFi updates include Across' new version and Ledger Live's staking feature.
Jerome Powell, the Federal Reserve chairman, reiterated his commitment to fighting inflation by continuing to raise interest rates, despite the potential cost of increased unemployment. This hawkish stance sent markets tumbling, with the Nasdaq, S&P, and crypto markets experiencing significant declines. Powell's speech came after a month of inflation data that showed a slight decrease, but he warned that this was not a sign that inflation had been defeated. In the meantime, the market is predicting that rate cuts will begin in summer 2023. The merge and macro events in the crypto world continue to be a topic of interest, with some arguing that macroeconomic factors have more impact on prices than the merge itself. Other stories include Avalanche's lawsuit against other blockchains, Michael Saylor potentially selling Bitcoin due to legal issues, and MakerDAO's intention to let its stablecoin dip below its peg. In the world of DeFi, Across has launched its new version, which focuses on higher capital efficiency, Layer 2 to Layer 2 transfers, and a new chain with Polygon. Additionally, the Ledger Live app now allows users to stake seven different coins directly inside the app.
Avalanche and Law Firm Under Investigation for Collusion: Avalanche and a law firm are under investigation for potentially colluding to harm competitors and distract regulators through class action lawsuits, with allegations of stock and cryptocurrency grants in exchange for pursuing this hidden purpose.
Avalanche and a law firm, Ross Friedman, are under investigation for potentially colluding to harm competitors and distract regulators through class action lawsuits. According to a report by CryptoLeaks.info, Ava Labs, the company behind Avalanche, allegedly granted Ross Friedman stock and cryptocurrency in exchange for pursuing this hidden purpose. By suing competitors and causing them to divert resources to defend against the lawsuits, Ava Labs could potentially gain a competitive advantage and profit from the price volatility caused by the litigation. Additionally, by litigating against competitors in ways that make them appear guilty of regulatory transgressions, Ava Labs could draw regulators' attention away from themselves. The validity of these claims is still under investigation, but the allegations highlight the potential for manipulative practices in the crypto industry.
Law firm Roche Freedman accused of using litigation to harm crypto competitors: Law firm Roche Freedman faces accusations of damaging competitors' reputations and gathering confidential info through legal discovery, potentially increasing their crypto holdings' value.
Law firm Roche Freedman, known for its involvement in class action lawsuits, is accused of using litigation as a tool to harm competitors in the crypto industry, such as Ava Labs, by damaging their reputations and gathering confidential information through legal discovery. The firm's actions could potentially increase the value of their own crypto holdings. The allegations include framing competitors and recording private meetings without consent. The crypto community and some industry figures have expressed skepticism towards these claims, while others believe they hold merit. The history of partnerships and litigation financing between Roche Freedman and Ava Labs also raises questions. The firm's Kyle Roche has denied the allegations, stating that the videos and articles against him are false and illegally obtained. The crypto community, including Avalanche, has publicly refuted the claims. The situation highlights the potential for legal maneuvers and conflicts of interest in the crypto industry.
Allegations of fake engagement and sock puppet accounts in crypto: Crypto community faces challenges with fake engagement, manipulation, and mistrust, emphasizing the need for transparency, authenticity, and ethical business practices.
The crypto community has seen allegations of organized and concerted fake engagement and sock puppet accounts, which have been linked to various blockchain projects including ICP, Dfinity, and Avalanche. These accounts, often represented as frogs, engage in social engineering tactics and spread FUD (Fear, Uncertainty, and Doubt) to manipulate the crypto market. The latest controversy involves the CryptoLeaks website, which is suspected to be a front for ICP or Dfinity, fueling speculation and mistrust among crypto enthusiasts. The issue highlights the importance of transparency and authenticity in the crypto space, and the need for community members to be vigilant against manipulative tactics. The ongoing legal battles and tax fraud allegations against Michael Sailor add to the complexity of the crypto landscape, emphasizing the importance of adhering to regulatory requirements and ethical business practices. Overall, it's crucial for the crypto community to focus on building innovative protocols and projects, rather than engaging in social and legal shenanigans that can harm the industry's reputation and trust.
Billionaire Tech Executive Faces Tax Fraud Allegations, Potential Penalties Exceed $100 Million: Michael Sailor, a billionaire tech executive, is under investigation for tax fraud in DC, potentially owing over $25 million in unpaid local income taxes. The outcome of the lawsuit against him and his company, MicroStrategy, is uncertain.
Michael Sailor, a billionaire tech executive, is facing tax fraud allegations from the District of Columbia attorney general, with potential penalties exceeding $100 million. Sailor, who has lived in DC for over a decade but never paid local income taxes, allegedly avoided over $25 million in taxes by pretending to be a resident of other jurisdictions. MicroStrategy, the company Sailor heads, is also named as a defendant in the lawsuit, with the outcome yet to be determined in court. This news comes as MicroStrategy reported a net loss of $1.1 billion due to the decline in Bitcoin's price, and the company continues to hold Bitcoin with no plans of selling. The controversy surrounding Sailor's tax situation could potentially lead to sell pressure on Bitcoin and MicroStrategy stock. In a separate matter, Rune Christensen, one of the founders of MakerDAO, is proposing a radical solution to depeg DAI from the dollar due to concerns about potential nation-state attacks on the stablecoin. These developments highlight the complexities and potential risks in the crypto industry.
MakerDAO's Shift to Decentralized Stablecoins: A Community Debate: MakerDAO's community is debating the shift from centralized to decentralized stablecoins, with differing viewpoints on ideology and collaboration with traditional finance. Leaders are exploring new strategies, such as multi-collateral DAI and forking the platform, to accommodate various perspectives and potentially increase decentralization and stability.
The MakerDAO community is currently grappling with the shift from a centralized stablecoin system to more decentralized alternatives. This debate is driven by differing viewpoints, with some advocating for a future where all collateral is decentralized, while others prioritize censorship resistance and collaboration with traditional financial institutions. MakerDAO's leaders, including Rune Christensen, have responded to this community pressure by exploring new strategies, such as multi-collateral DAI and forking the platform into separate entities for each ideology. The potential outcome is a diverse ecosystem with multiple stablecoins and shared MKR governance. This approach could lead to increased decentralization and stability, but may come at the cost of shared liquidity. The debate is ongoing, with various stakeholders advocating for their preferred approach. Ultimately, the outcome will depend on the community's collective decision-making and the evolving landscape of decentralized finance.
Brave Wallet: A Secure Multi-Chain Crypto Wallet Built into the Brave Browser: Brave Wallet, integrated into Brave Browser, offers enhanced security, supports Ethereum, Solana, NFTs, DeFi apps, and liquid staking tokens like CbETH from centralized exchanges, but users should be aware of potential fees and risks
The Brave Wallet, a secure multi-chain crypto wallet built into the Brave Browser, offers an extra level of security compared to traditional browser extensions by not requiring them. This wallet supports multiple chains including Ethereum and Solana, and allows users to store, send, swap, manage NFTs, and connect to other wallets and DeFi apps. A new development in the crypto space is the introduction of liquid staking tokens like CbETH by centralized exchanges, which allows users to do the same things with staked ETH as with the token itself. However, it's important to note that Coinbase, the exchange issuing CbETH, charges a 25% fee on staking rewards, which could impact yields. While centralized exchanges offer liquidity and potential insurance mechanisms, they also come with risks such as potential censorship and the risk that the exchange itself could experience issues. Investors should be mindful of these risks and consider the full risk profile before deciding to use a centralized staking provider.
Efficient and cost-effective Ethereum network with Arbitrum and Optimism: Recent upgrades in Arbitrum and Optimism enhance Ethereum's scalability and accessibility, but concerns about centralization of nodes on cloud infrastructure persist.
The recent developments in Ethereum's layer 2 solutions, specifically Arbitrum's Nitro upgrade and Optimism's high usage, are leading to a more efficient and cost-effective Ethereum network. This is significant because it allows for greater scalability and accessibility, making Ethereum more attractive for developers and users alike. However, there is a concern about the centralization of nodes on cloud infrastructure, such as Amazon Web Services. A recent announcement by a cloud data provider, Hertzner, banning Ethereum nodes raises questions about the potential risks of relying too heavily on these services. Despite this, it is important to note that the decentralized nature of Ethereum ensures that no single entity has control over the network, and nodes can easily be spun up on alternative infrastructure if needed. Overall, these developments are positive steps towards improving the Ethereum network and paving the way for its continued growth.
Decentralized technologies like Ethereum and NFTs resist restrictions: Despite potential bans or restrictions, the decentralized nature of cryptocurrencies and blockchain technology, such as Ethereum and NFTs, enables continued adoption and innovation, with increasing acceptance on social media platforms.
The decentralized nature of cryptocurrencies and blockchain technology makes it difficult for centralized entities to restrict access or ban specific networks, such as Ethereum, even if they try. The value and utility brought by these technologies are expected to outweigh any potential restrictions, leading to continued adoption and innovation. A current example of this progress is the increasing acceptance and integration of NFTs into social media platforms like Instagram and Reddit. Despite some negative perception towards NFTs, the industry is working on creating more relevant and desirable NFTs to win over skeptics. Vitalik Buterin's new book, "Proof of Stake," further highlights the philosophy and importance of blockchain technology. The ongoing development and adoption of these technologies will continue to challenge and adapt to the evolving regulatory landscape.
The Future Relevance of Being an NFT Owner: Perception of NFTs varies, some see value, others gimmicks or scams. Use cases like ticketing gain traction, but line between blockchain and centralized databases can be blurry. NFT value influenced by factors beyond intrinsic worth, such as hype and stories. Regulatory concerns and security risks also exist.
The perception of NFTs, especially among certain communities, is evolving rapidly. While some see NFTs as valuable digital assets, others view them as mere gimmicks or even scams. This was highlighted in a Reddit thread discussing the future relevance of the statement "as an NFT owner." Some users saw it as a nonsensical statement, while others defended NFTs. Meanwhile, the use of NFTs in specific industries, such as ticketing through the Flow blockchain, is gaining traction. Despite past criticisms of Flow's centralization, this use case makes sense due to the large amounts of data involved and the potential cost savings. However, the line between blockchain and centralized databases can be blurry, and it's important to consider the benefits and drawbacks of each. A notable example of the hype surrounding NFTs is the infamous Goose NFT, which sold for millions but is now part of a bankruptcy liquidation process. The value of NFTs can be influenced by factors beyond their intrinsic worth, such as stories and hype. On the regulatory front, the FBI issued a warning about vulnerable DeFi platforms and highlighted attack vectors like flash loans and price manipulation. The potential financial gains for malicious actors, such as North Korea, are significant, making security a top priority.
FBI tackles crypto attacks and human errors, while new initiatives explore Web 3 opportunities: The crypto world faces new challenges from cyber attacks and human errors, but also offers opportunities through new initiatives and investments in Web 3 technologies.
The crypto world is evolving rapidly, and with this evolution comes new challenges and risks. The FBI is currently dealing with various attacks on DeFi companies and bridges, highlighting the need for better security measures and potentially a new form of "Internet police." At the same time, human error can also lead to significant financial losses, as seen in the case of crypto.com accidentally transferring $10,500,000 instead of $100 to a customer. In the world of blockchains and DAOs, modular systems like Metropolis are pioneering new features, while initiatives like the Proof Collective, led by Kevin Rose, are raising large sums of money to build out the Web 3 universe. Lastly, investors like Alexis Ohanian are recognizing the potential opportunities in the crypto space, even during market downturns. Overall, it's an exciting and dynamic time in the crypto world, filled with innovation, risks, and opportunities.
Power shift towards VCs in crypto industry: VCs capitalize on bull markets, deploy funds during bear markets, benefiting both parties, and crypto industry offers abundant job opportunities
The power dynamic in the crypto industry has shifted towards venture capitalists (VCs) due to the current bull market, leading them to raise large sums of money and deploy them during bear markets. This strategy benefits both VCs and retail investors, as it's advantageous to buy during market dips. Additionally, the crypto industry is experiencing a surge in job opportunities, making it an excellent time for listeners to explore career possibilities in this field. The Bankless jobs board offers various listings for software engineers, HR business partners, and more. Staking your crypto involves trusting the chosen provider, and while there is a risk of slashing, it's generally avoidable through professional practices and redundancy measures. However, social slashing, where a staking pool censors transactions, could lead to the need to withdraw deposits. Overall, the crypto landscape presents opportunities for investment and career growth, but it's crucial to understand the risks and trust the right providers.
Avoiding double-signing in Ethereum staking: Stakers must be cautious about running redundant validators to prevent double-signing and potential slashing. Accepting a small penalty or using advanced solutions like DVT technology are options to mitigate this risk.
Ethereum stakers need to be careful about running redundant validators to avoid getting slashed due to double-signing. The most common scenario is when a staker sets up a standby computer with the same keys as the active one, intending for it to take over when the active one goes offline. However, if both computers go online at the same time, they could sign the same messages, leading to a slashing event. To prevent this, stakers can either accept the small leakage penalty or use more advanced solutions like DVT technology. It's also important to note that Ethereum software doesn't censor transactions by default, and validators are run in units of 32 Ether, not as a single entity with a larger amount. Additionally, stakers can run multiple validators on the same machine. Lastly, Ethereum and Bitcoin principles largely align, but the execution is where the disagreement lies.
Bitcoin vs Ethereum Maximalists and the Future of Crypto: Bitcoin and Ethereum maximalists have differing views on achieving blockchain principles, with Ethereum exploring decentralized finance and Bitcoin sticking to its original design. Industry failures have led to the development of decentralized projects, and Ethereum's merge reduces its issuance, impacting its market presence.
While there is agreement on the core principles of blockchain technology between Bitcoin and Ethereum maximalists, their approaches to achieving those principles differ significantly. Bitcoin maximalists believe that Bitcoin is the only viable manifestation of these principles, while Ethereum maximalists believe in exploring different routes to achieve decentralization. A notable difference is the presence of decentralized finance (DeFi) in Ethereum, which is absent in Bitcoin. The crypto industry as a whole has seen its fair share of centralized projects that touted decentralization but ultimately failed, leading to "bad times." However, these failures have paved the way for the development of decentralized projects that will bring about "good times" in the future. Ryan Shalam's take that 99% of the crypto industry is a joke but the remaining 1% will change the world is a reminder that acknowledging the industry's flaws is crucial to understanding its potential. The merge in Ethereum, which reduces its issuance by 90%, is a significant event that will impact Ethereum's gravity in the market, but the exact implications of this are still being debated.
From proof of work to proof of stake in Ethereum's consensus mechanism: Proof of stake leads to upward pressure on Ethereum's price as stakers compete to be the most bullish, reducing sell pressure by 90% and making it easier for the price to rise significantly.
The shift from proof of work to proof of stake in Ethereum's consensus mechanism fundamentally changes the dynamics of the network. Proof of work involves a downward pressure on price due to the race among miners to sell their newly minted assets. In contrast, proof of stake features an upward pressure on price as stakers compete to be the most bullish and accept lower yields as the network becomes more saturated. Essentially, proof of work approaches 100% sell pressure, while proof of stake approaches 0% sell pressure. This metaphorically represents a reduction in issuance by 90% and the "turning off" of gravity on Ethereum's price, making it easier for the price to rise significantly. Additionally, the speaker expressed admiration for Andreas Antonopoulos, a well-known figure in the crypto community, who embodies the fundamental values of Bitcoin and has been a significant influence on the speaker's understanding of the space.
Enhancing the mood with party mode lights in a home studio vs. the competition between monolithic layer 1s and roll-up solutions in the crypto world: Monolithic layer 1s must focus on business development and partnerships to compete with roll-up solutions like Arbitrum and Optimism in the crypto space. Ethereum and Cosmos ecosystem may emerge as dominant players.
The use of party mode lights in a home studio setting is a simple pleasure that can enhance the mood during work hours. Meanwhile, in the world of blockchain technology, the competition between monolithic layer 1s and roll-up solutions is heating up. Roll-ups, like Arbitrum and Optimism, are offering increased scalability and efficiency, making it challenging for monolithic layer 1s to compete on a purely technological basis. Instead, they must focus on business development and partnerships to stay relevant. In the long term, it seems that Ethereum and the Cosmos ecosystem may emerge as the dominant players, leaving little room for middle players. Additionally, the Drake meme drop on the Bankless podcast was a significant event in the crypto community, showcasing the importance of staying informed and engaged in the rapidly evolving crypto space.
Overcoming technical challenges to produce a flawless podcast: Skilled editors and the right team can transform a difficult recording situation into a successful podcast, but investing in cryptocurrencies carries risks
Despite the technical challenges, such as using Skype due to poor internet connection during the recording of the episode, the team's skilled editors were able to produce a flawless podcast. This experience serves as a reminder that even when faced with difficulties, the right team and tools can help turn a potentially flawed situation into a successful outcome. However, it's important to remember that investing in cryptocurrencies like Bitcoin, ETH, and DeFi carries risks, and you could potentially lose your investment. Regardless, the hosts are excited to continue the journey and invite listeners to join them on the Bankless journey. The episode may not have been perfect, but the team's dedication and expertise shone through.
