ROLLUP: Is Altcoin Season Here? | Treasury’s Bond War | Robinhood Chain Mania | OpenAI’s Math Controversy

0:00It's Friday, September 11th, and it's time for the bankless, weekly roll-up. The AMC CEO declares war on Robinhood tokenized stocks calling them contemptible, outrageous, disgusting, detestable, inexcusable, and vile. Wow, did he really use all of those words? A Vlad, Vlad Tene from Robinhood simply replies, what's the concern spawning a war on Twitter? We got some other news as well. What else are we talking about this week, right? Treasury. David, while you're gone, there was some war in the Treasury markets, and Besson has continued to up the stakes on that war. Now he has tripled the long-dated bond buybacks to six billion, yet yields are still increasing anyway. We got to discuss that. So, David, I want to ask you about maybe a potential altcoin season? Like a baby altcoin season? We have Z-Cat, we have Venice, we have Near.

1:01All of these things are up. Robinhood chain is going wild. Some people are asking whether this is altcoin season and whether it's way ahead of schedule and why. One of the reasons why VVV, at least of all the tokens, is up big is because Open AI was caught red handed, stealing the work of a million dollar math prize that had gone unsolved for decades. It has been solved, and Open AI is taking credit. Did they actually do the work, or was it one of Open AI's customers doing the work? And they merely just crossed the finish line with the work that somebody else did. We're going to talk about all this drama. And more, we also got some frame transactions out of the Ethereum landscape. This is account abstraction. Once again, coming online as a discussion, and now people are fighting ETH because if Ethereum does anything, some people will choose to fight ETH about it. And Hunter Biden, the story of the year, launches a meme coin called Laptop. It's the exact movie that you would expect to happen. You don't need to watch it, so we'll just be right at it for you.

2:03I know everyone is waiting. I'm baited by the breath to talk about the Hunter Biden Laptop, but you're getting for weight to the end. We're going to start talking about markets. Bitcoin and Ether, the blue chips of the industry, flat on the week. Meanwhile, the following tokens all hit all time highs. Lighter, VVV and Zcash all hit all time highs this week, near up 30% arbitrum, up 40%, which brings Ryan asking the question, are we in an altcoin season? Is this altcoin season? Ryan is altcoin season? That was a hypothetical question. I know the answer to that already. But I want to get your answer to that question. I know the real answer. What do you think? This doesn't usually happen, or at least that's part of the narrative. Bitcoin's supposed to pump first. That's supposed to confirm the early bull. I guess we got a little bit of a pump. When you left two weeks ago, where was Bitcoin? It had already jumped to close to 80k. When you'd left?

3:03Bitcoin pumped from 65,000 up to 77,000 three weeks ago. We have actually, Bitcoin has been ranging between 76 and 82, 81 for three weeks now. We've got to go in any direction. We got to 81k, but we didn't get to the May highs, actually, above 82, which is somewhat interesting. We were higher in May, but anyway, we got a bit of a pump. Now we have all of these non-biquin assets pumping. What do you think? Are we in the mini micro-altcoin season? I'm reminded of a conversation I had forever ago with Michael Belito, where he was telling me about one of the macro commentators that he likes the most to pay attention to the Fed, pay attention to macro, but also investing crypto. It was a funny bit where he was saying, oh, yeah, I think the Fed needs to ease. This is two to three years ago. The Fed needs to ease. We're going into an easy money era. Therefore, I'm buying Pudgey Penguins.

4:04I think that's what happened in the crypto industry recently. Bessent is going to war against the bond market. We are doing quote unquote, quantitative easing in our own new way. Therefore, crypto industry participants are buying meme coins. The degens are just going straight to the end. Bitcoin moves slowly, ether moves slowly, but some of these tokens that hit all time highs, like lighter, Venice, Z cash, like I said, near an arbitrum are up big. Meme coins are hip-printing new highs in terms of dex volume. I think that's just a lot of the crypto degens seeing the same pattern of just like, oh, we're going into an easy money era. Let's go to the riskiest table in the casino because that's just final reflex that we have. You know what I call that? The degen debatement trade. Because it's basically the debatement trade. You just described it, except it's like going way down market where you can get the 10X,

5:05the 25X, the 100X style returns. But I do think it's too early to call altcoin season for anything. I'm worried about us getting ahead of our ski tips here. Yeah. It's like, look, Bitcoin dominance is still almost as 60%. So like, have you seen, look at the start. Do you see anything that has shaken up Bitcoin dominance? You cannot call a Bitcoin, you know, altcoin season when Bitcoin dominance is near 60%. But and Michael NATO actually reminded me of this in 2023, which I don't think any of us would think of as a particularly bullish year for crypto. It was like, we were sort of rebounding. There was like, we were just trying to get over 2022 and FTX. It turned out to be sort of an early bull. But they were pockets. It was a repair year. It was a repair year. It did not feel particularly bullish, right? Not until we got the kind of the black rocket yet, did things really start to feel bullish and crypto like October 2023, I think. Yeah.

6:05But do you remember all of these pockets of speculation back in 2023? So we had blur. Do you remember that? That was February 2023. In March 2023, the Arb token actually launched. So we got an L2 kind of revival. We had Bitcoin ordinals. That was also in March. We had. World coin launching in 2023 as well. That was in July. We had, do you remember 2023 summer, friend tech? Remember when that came on the scene? Oh my lord. Just a pocket of pure speculation. And the speculation bubble kind of like moved from thing to thing throughout 2023 toward the year end. We had the Gito air drop and the Tia air drop and they were all the spec. And the Gito and Tia air drops were absolutely the starting pistol for the following year. They were. So what was this moving bubble of speculation because it was just the crypto natives who were here. I still think it's that. I still think it's crypto natives are here. And this is a bubble, you know, a pocket of air of speculation that's moved to kind of

7:06Robin Hood chain, but too early to call a full altcoin season. Do you think as well that there can be an altcoin season without ether the asset, David, without ether getting its due? Okay. This was a. Yeah. Thank you, actually. It's time that we've already said that. Okay. But maybe this time is different. This was a post from Michael NATO as well. He said Robin Hood buying a ton of eth seems like an obvious move at this point. They'll likely make money on it. And he says as I think more about ethos cycle, this is probably the bullcase nobody's talking about not the store of value narrative, just institutions to point in buying and then signaling to the community with eth purchases. So he's saying Robin Hood potentially they have the success of the Robinhood chain. How do you get in good with the crypto natives who are buying all the meme coin assets in the Robinhood chain will you buy some eth and you put it on the balance sheet? You'll probably make money on that trade alone, particularly when you get behind it. That could be a catalyst for eth.

8:07He's also big in this idea of like a new wealth creation, you know, and I know you've talked about this in the past, which is like ICO wealth creation and FT wealth creation meme coin wealth creation. Yeah. You have to have some wealth creation episode in order for the full bull to get running. Well, the question is who are the meme coin traders on Robinhood right now? And if they are getting wealthy right now, where are they going to deploy that? And Mike's thesis is it's actually coming from parts of the eth community who missed out on pump fun and all the slona meme coin chain. Yeah, the un plumber's won the last battle. Yeah, you think of the archetype of someone like Eric Conner, for instance, who sort of like a eth maxi of maxi, he didn't do much with respect. No, not as much anymore. Not even a line, but he is. What's he trading now? Well, is he trading on Robinhood now? Boner coin is where? Boner. Okay. Right.

9:07So he thinks that wealth creation event might actually feed back into ether the asset. Anyway, there's there's a little speaking. So if I want to consider this a wealth creation event, I would like to throw a soft flag at meme coins being wealth creation event like ICOs, which in hindsight were terrible. I'm not excusing them. At least had assemblance of, hey, we are going to create something that is going to be good for the world. And meme coins are just, it's a meme coin called Boner. It doesn't pretend to be anything. It's not. That's the whole point. But I would like to not perfectly equate meme coins with the pattern of generative startups even though I'm not saying generative startups are tepenterable. No, no one's, I'm not making any moral claims on these things or any even utility type claims or any good for society claims. I'm just saying it's wealth creation. And if you look over on Robinhood chain, there is wealth being created. There are market caps and coins going up right now. And so, are they going to keep all of their wealth in Boner coin or are they going

10:12to move that into some other asset? That's the wealth creation event. Okay. Ryan, the last thing I said to you before disappearing for Burning Man at the end of the weekly roll up before I logged off was, hey, there's this meta happening that's kind of like early, but it's like these weird paired tokenized stocks with a meme coin thing. And so people are like putting a meme coin in an L people with a tokenized stock. And that was it. And that was the end of the weekly roll up and then I would gone for two weeks. The last thing I did before I logged off was I bought a thousand dollars of Boner at a $370,000 market cap. And then my days later, I look at my phone connected to Starlink and I'm up $120,000. Wow. And Eric Carter is up two million. Congrats, my trade. That was wild. What enticed you to buy that specific coin at that time? Yeah. Like how did I pick out Boner? I was like thinking about this. Oh, is that the one that's like, that's paired against the hymn stock, right? Which is like hymn stock, erectile dysfunction, you know, stock or something.

11:16Yeah, there's like, there's like Boner advertisements all over New York City. And it's all kind of like ED coded, like soft coded because it gives like a mail behind coded event. And then you get some sort of like, deniability by it's like, it's like not actually speaking the words into existence. It's like only, it's like a wink wink, not to not to kind of think. Okay. And you have a health product. Your question was like, of all the meme coins I bought, how did I, how did I choose to buy Boner of all of all of them? And also, what does that say about you? That's my question. I'll get to that. I'll put that on the premium fee. So, that's better. It makes sixth graders laugh. So that's good. That's bullish. It kind of was reminiscent of fart coin of just like, it's so simple, it's so mimetic. Like why did fart coin run like two years ago? Because fart, it's fart. It's like such a mimetic, you like, you laughed at farts so many times when you were in middle school and high school.

12:17So same kind of category. It's very simple, very mimetic. And then it also fit into the category that I was telling you about like before I logged off, which was like, it's paired with a tokenized stock. It's very simple as very mimetic. Like a fart coin ran because we hadn't tokenized farts yet. Boner ran because we hadn't tokenized boners yet. And those things like came together and it's like, okay, I think this is like valid enough. A brilliant logic, David. I think you should go full full full full time meme coin trading with this type of insight. I think I think you do really well in this market. Unlike most people who bought Boner, I think this is a local top on the casino, if you will. And like one of the reasons why I think that's true is like if you look at the ponds token, which is like the new meme coin launch pad, that thing is down like 50% off of its highs. The Robert Hood REV activity is down off of its highs.

13:21I was writing an email to the hymns CEO inviting him to come on the podcast just because he was in the meta. Yeah. And I was like trying to like think about this from the receiver side because like sometimes stretch guests, you need to like put a lot more effort. You know the deal. You have to put more effort into like enticing them to come on the podcast. So I'm trying to like put myself into the position of the hymns CEO because he followed the Boner Twitter account because again, Boner is paired with hymns. And so like when he even beat hymns is going up as a result of of Boner, at least, you know, short term. I'm not sure. I'm not sure. The hymns token I stock on Robin Hood, like dislocated because there was so much demand for it. And so the theory is of this tokenized stock meme coin LP thing is that this is going to be really helpful for the equity on the public market because you have a new set of buyers coming in for the speculative meme coin reasons. And so I go and pull up in the data. I got to go look at the receipts and hymns is a 6.5 billion dollar company.

14:24It has a 30% outstanding short supply. So it's heavily shorted. And so the idea is that these tokenized stock meme coin things will help short squeeze the stock because there's enough demand to buy the tokenized version. And so there will those with the enough buying pressure will do a short squeeze on the hedge funds. Same thing as GM. There is $3.5 million of tokenized hymns stock on Robin Hood chain on a 6.5 billion dollar stock. It's not even worth this time. That is not happening. There is no short squeeze that is happening. Yeah. And so I think that whole narrative is very far fetched. We're seeing a this is just this week. So this could be very short term. You may be just doing a break before chips go back on the table. But I think this is like a kind of a I think we're kind of top on this current iteration of the casino and same thing with the kind of the flag that was going earlier. So like meme coins are not wealth generative activity. This is not new. The tokenized stock meme coin LP positions are it's like kind of novel in meme coin land.

15:30But broadly, this is still meme coins. This is still the same movie that we've seen. This is not going to escape reach escape velocity out of the crypto industry in the same way that NFTs did. I kind of think that the meme coin speculative frenzy that we have seen in the last like six weeks is about to be over. I don't know if I want to say that so confidently, but it kind of feels that way. Well, anyways, I sold most of my boner. I was going to say I was going to say I hope you've sold your boner. I sold most of my boner. If this this is your true opinion, uh, we'll discuss a bit more. We're about this, including the AMC stock trade, but on more serious matters, let's talk about the global bond market, shall we? So I think when you left, let's pivot into the hard pivot. He's that term. Okay. So the bond war, this is like week four. I think as you're leaving, um, the treasury put the best and put was starting that trade was starting to be put on.

16:30At the time you left, it was two billion dollars. You're going to buy long dated bonds, two billion per week. How do we do that? That went to four billion. And now David, it's at six. So just this week, we are up three X here's a tweet. The US treasury announced it is buying back six billion in long term debt tripling levels seen before the recent intervention announcement. So they keep upping the stakes here in an effort to get treasury yields down. This was a fascinating clip from Besson. He was speaking at a fireside chat. Let me just play this. Whenever people say, oh, well, treasury secretary is taking a risk as well. It's my dream. I have asymmetric information. I am the house now. So right. So when we intervene with the Japanese yen, I have pretty good insight into what the Japanese, what the bankers Japan is going to do, what Japanese policy makers are going

17:34to do. Do you hear that, David? I in the house now. Does this? I'm not bullish. That's an Icarus. He's Icarus. He's Icarus. You are not the house. Don't want the market is the house. You are a large player, but you are not larger than the market. There's something reminiscent. We've seen our share of Icarus in crypto over the years. He's not Icarus saying that hard, but he's getting up there. And yeah, it doesn't make me feel good about where bond yields are going on that. I think it's very notable that the buybacks tripled and then yields have risen. Yes. If you listen to my episode with Jim Bianco, he has a perfect explanation for this is that you want to incent bond buyers by hiking rates because it's giving them confidence that inflation is going to be under control. Bessent is doing the opposite. He's doing QE. He is injecting money. He's injecting liquidity, which is going to induce more inflation. And so it's causing bond holders to sell because they are not confident that inflation is

18:39going to be under control. And so the more QE that Bessent buys or the more bonds that Bessent buys, the more bonds sellers are coming into the market is Jim Bianco's rationale. And that would predict exactly this effect that happened this week. Well, I think there's an element of that. He keeps rationing it up and he's tripled the buys. And this is the 30 year yield. It's a 5.3%. I mean, high since 2007, it continues to make all time highs. This is the 10 year. It's also creeping up. All of this has an effect on politics and of course midterms. So this is mortgage rates after kind of decreasing to close to 6%. They're back up heading towards 7%. We also have inflation, as you mentioned, diesel is at a record almost $6 per gallon right now. But basically the 30 year and the 10 year and the bond market sets the cost of capital.

19:40So you can imagine any kind of loan product, whether it's a car loan, whether it's a credit card, whether it's a mortgage, those numbers are going up with the bond market continuing to go up. And I don't know if you saw this David, but this happened, I guess the day before we've recorded this is a Donald Trump injecting his input into this, not specifically about bonds, but the politics of affordability. Here's what he said. But what we're doing is because we've done so well and because our country is making so much money that only I can make this promise to you. And here is my promise. If the Republicans win the House of Representatives and the United States Senate, both of them, because of our economic, tremendous economic success, like in history we've never had anything like what's happening. But because of our tremendous strength and success economically, I will issue a dividend

20:46to every adult citizen in the United States of America for $5,000. There you go, David. A $5,000 dividend to every adult in the United States of America. The cost of this would be about a trillion dollars. Of course tariffs would pay for all of this. You know, tariffs, meanwhile, I think they raised about 150 billion and have been spent already 10 times that amount. And this is an additional one trillion. So Trump with just a direct appeal to populism on the backdrop of basically a top reissue, maybe the top issue for voters, which is like cost of living affordability. There's a Reuters poll I saw today, 74% say cost of living is on the wrong track. It's a top issue for for both parties and the cost of capital rising, the bond market rising, does nothing to improve that makes it far worse.

21:49So what's going to happen there? Did the markets react after he said this? I don't know. Trump says a lot of things. Well, I mean, he's like, he said if Republicans win the Senate and the House, it's kind of a, it was probably not going to happen, right? Like the Senate and the House, not before people are incented with $5,000. Yeah, you think that's really going to move people into kind of, you know, like, no, do you think you can actually get voters to just be barbed for, you know, $5,000 in order to vote? It's especially when it's a promise coming from Donald Trump, like you just like, you don't know whether you can cash that check whether that would actually happen or not, or whether it's just rhetoric. Yeah. So it was triggered by memory of when we all got $1200 helicopter money from the Biden administration during COVID and then Brian Armstrong tweeted out the most incredible chart ever, which was a chart of dollar deposits into Coinbase by count. And there was like, you know, you would see a lot of $1,000 deposits.

22:50You would see a lot of $5,000 deposits. But like the week of the $1200 dollar, like $1200 checks, the number of $1200 deposits into Coinbase was just like it blew up the chart. And I think people, the government, everyone should take note that when the government hands you money, people take it to buy Bitcoin or hard assets generally or the DGN debatement assets like me or me, whatever. Sure. Yeah. But like they're not keeping it in your system because obviously if you disrespect your financial system, people are wanting to take the money that you are just disrespecting it with and take it elsewhere and remove it from the system. Here's the thing though. I know we've been, this whole rally has been kicked off by the debatement trade and sort of the best input, you know, four weeks ago, this crypto rally. I don't think that this, the reason for the yields going up is just debatement and just inflation, right? It's, it's AI. And has he made this point the last couple of weeks?

23:50Right. It's just the cost of capital is going up because AI is so profitable. And they can make profit on a token and they need capital. They need an AI token. AI token. Yeah, I should say an AI token. They can generate tons of cash on that and they need a lot of investment in order to continue that build out and they will pay top dollar yields to investors. And so the nominal GDP is going up and in that backdrop, yields will go up and they will continue to go up. Another error to look at actually is the 1980s where the market was just kind of like humming. And I read a Michael Howell post or Louis Wiku compared right now to actually 1987. He says kind of like that. The yields were very high, but we also had GDP and an economy that was like raging and hot. And so sometimes high yields are not just examples of like a debatement trade. It can be that the economy is kind of booming and nominal returns and nominal GDP is increasing

24:55upwards. So a lot of that is happening, which is why like, I don't know if it makes sense for Besson to fight this secular trend. Look, Besson has way more experience than me. That's right. Moving more information than me. Yes, he's the house. But like, he's the house. But man, I don't like it just doesn't make me comfortable to see the government react to the market and try to win a thumb war over the market. Like you don't, the market always wins. The market is the house. You are not the house, sir. It feels a little panicky. We got to talk more about Robinhood, including the AMC CEO. You said it was that he used these words contemptible, outrageous, disgusting and detestable. What is he talking about? We'll discuss all that and more. But before we do, let's thank the sponsors that made this episode possible. I've been trading crypto assets for almost a decade. I've used so many wallets, exchanges, aggregators, frontends, and I'm kind of always looking for the same thing. One interface with deep liquidity across a bunch of chains and assets and the ability to act in private.

25:55And I still control my own funds. And I've never really found it. And I'm always switching wallets, juggling gas fees, or getting eaten by slippage. Near.com feels fundamentally different to me. My account is easy to use and I can take all the actions I want from any chain while my activity remains confidential. It runs on near, which has moved over $23 billion cross chain using post-quantum signing that has over five years of uptime. Near.com is the best way to be on chain and be in control. Get 20% of your trading fees back to the bankless link is in the show notes. Not investment advice. Bankless Nation, we've built something for you. Introducing the bankless MCP. Chat GBT and cloud are great at a lot of things, but ask them anything beyond the basics of crypto, about protocol mechanics, tokenomics, or just what happened last week in crypto, and the gaps will start to show. The problem is context. Bankless, on the other hand, has spent almost a decade building one of the deepest archives of crypto data anywhere. More than 2000 podcast transcripts, 10,000 articles, and countless conversations with the people actually building this industry. And now we've structured all of that data into the bankless MCP.

26:57So you can go and connect it to your cloud or chat to BT and suddenly your AI can answer your crypto queries with the entire bankless archive behind it. And every new bankless article or episode gets added automatically so the context keeps staying up to date. The bankless MCP is exclusively available to bankless premium subscribers. So you can go to bankless.com, upgrade to premium, and connect the MCP in just a few minutes and all of a sudden your crypto queries to your AI, LLM, whatever you use will get a thousand times better. So go check it out. There is a link in the show notes and once you become a bankless premium member, you can hop into the bankless discord and let me know how you like it. Cheers. Ryan, you should never, ever annualize a weekly chart. If you did, the Robinhood chain is printing Robinhood 1.5 billion dollars of annualized revenue in just from the chain. Don't annualize a weekly chart. But the metrics coming out of Robinhood chain is pretty damn crazy. Robinhood chain is now the number one blockchain by revenue generated 30 million dollars this

27:59last week, this last week. Next of this is from memecoin trading, but also because these memecoins are paired with tokenized stocks, that means that it's also tokenized stock volume as well. So that's one of the big on-locks here. It's that because Robinhood has invested in the whole tokenized stock ecosystem, they are capturing this activity. And really, it's also interesting to say, interesting to learn that I think like 70 or 80% of the volume on Robinhood chain, at least on the memecoin activity is coming from the FOMO app. And so FOMO is acting as a huge conduit of activity. And the FOMO plus Robinhood chain combination is generating the most speculative fervor activity since the whole memecoin media on Salona in like 2023. And so once again, the meta is memecoins. It was memecoins last time. It was memecoins the time before that. And now with Robinhood chain and the brand new social trading app, it's memecoins once again.

29:00But it is pretty cool nonetheless to see a big chain launch and generate a lot of excitement activity in crypto. I saw this even pump.fun is trying to catch up on that pair meta with a stock and a meme coin. So they just launched custom pairs, allow you to pair any memecoin on pump with tokenized stock or even commodity gold, any type of asset. So that seems to be the current narrative of choice. You do not think this has legs, as you said earlier, but it is providing, we are providing some gasoline and energy to all of the, even some of the blue chip defi on the Robinhood chain. So most notably, Uniswap is absolutely pumping. So this is a uni burn. Of course, they have the fee burn now. I mean, for years, it was like uni token, when burn, when burn, now they have it. It's active in fee switch 200 million per year in burn. It's getting close to that at least on the seven day, which you just say you shouldn't annualize a one week chart.

30:02Well, if you did annualize the Uniswap burn, at least right now, $200 million. And a lot of that is on the back of this Robinhood meme economy taking shape with stocks and with memecoins. But there is someone we've been talking about who is not too happy about it. This guy's name is Adam Aaron. He is the CEO of AMC. And he said that line, I find this practice to be contemptible, outrageous, disgusting, despicable, it's vile. How can this possibly be legal? What's he talking about, David? He's not talking about memecoins, which is usually the words that you hear, vying point towards memecoins. He's talking about the tokenized stocks. His own stock, right? His own stock AMC is a tokenized stock on Robinhood chain. And that is the practice that he thinks is contemptible. Vlad Tenif, the CEO of Robinhood, he replied to this very long paragraph of text on that

31:03Adam Aaron, the AMC CEO put on Twitter. He simply replied, what's the concern? Question mark. Aaron tweeted his reply. I'll tell you what the concern is. And then another very long paragraph of text. And then I never really got to the bottom of what he was really concerned about other than how these stocks don't have shareholder rights, don't have governance rights. And so if you are an owner of the AMC tokenized stock, you aren't able to use that stock to govern over AMC. Does he really care about that? Is that really what he's concerned about? Is that some of his shareholders aren't able to participate in governance? That's what matters to him the most. It's kind of funny because wasn't AMC like one of the sort of GME type meme stocks, it was GME adjacent. Yeah, for sure. I don't know why he's so angry because he's been in this game for a while, but he ends this, the second tweet, multiple paragraphs.

32:04I hear by Colin U in Robin Hood to voluntarily cease and desist the trading of AMC stock tokens. You must cease and desist this. Vlad was actually on Squawk box the following morning asked about this. And I think he gives some details into the structure of these types of tokenized stocks and the rights they do confer and the rights they don't. Let's go play that clip. I kind of hear what you're saying, but I understand Adam Erinzen's frustration. He's trying to build something. He's trying to continue to build something. And he wants investors who are interested and believe in his product to come to him, not to go through you. He thinks if they go to you instead of going to him, his stock price is not going to do as well. He points out validly that if they're going to you instead of him, they don't get a chance to vote as a shareholder. I can understand why a CEO would be frustrated and upset about that. What makes you think that other CEOs aren't going to think the same thing?

33:05Hey, if they're interested in buying shares of my company, they should buy it from me, not buy something that you've modeled to transfer off of it through you that may in turn hurt my stock price because I'm not getting all the people who are interested in buying my stock, buying it. I mean, I think that there's two things there. Number one, these are products available outside the US in 120 plus countries. And in a lot of those places, people don't have easy access to US equities. There's no underlying brokerage infrastructure. There's no Robinhood where you can go on your app and buy shares. So we think a lot of this is actually net new business and the opportunity for these companies to access a whole new, what's that a guarantee gift from it? Well, he gets access to a whole new shareholder of a base, people who have exposure to his stock. I do. And because the tokens are backed one by one to one by underlying shares, there is stock

34:12purchase backing these tokens. So I think that's just a misconception. Obviously. Just so I understand because it's one to one, does the token come with all of the voting rights and everything else that's associated dividends and the like with owning the actual stock? It comes with dividends. Voting rights, not in this case because it is a debt security and the shares are held as collateral. But again, that's not dissimilar to how an ADR or an ETF would function. If you have an ETF and you get exposure to an underlying, you're not voting in each underlying. Larry, thank you for my stuff. I want to put him in charge, Vlad. I really like his politics. Is that possible? Can I just look into that? Yeah, thanks. Vlad, can you vote the shares?

35:16Me personally? I mean, no, I'm saying. Is Robinhood going to be voting the share in the same way that Joe is happy that Larry's voting shares, though it's his firm, is Robinhood voting those shares? I think that we haven't really announced plans for the voting aspect of that. So I mean, we can we'll certainly share more if we have it. But again, there is established precedent for creating these types of products and they give exposure to these assets to people all over the world. So I do think this is the future. The entire financial industry is headed in this direction. The US is also working on innovation exemptions to allow for tokenized securities out here. And it'll take time to educate the issuers, the market, but we already see the benefits.

36:22And I think it's a little bit ironic in this case because one of the benefits of tokenization is that you have instant settlement. So actually the underlying reasons behind the GameStop and AMC issues in 2021 would largely be resolved with this new infrastructure. I thought Vlad made fantastic points there. And I actually really think that the concerns from the AMC CEO and even the SquawkBach House are just misunderstood. They're like, okay, Vlad, you get a new investor base, but not the AMC, not the AMC corporation is just strong. It is a conduit. The Robinhood tokenized stocks is a conduit between a new investor base that would not have otherwise bought the stock. And AMC does get the economic connection between these buyers that doesn't get the shareholder governance connections, but honestly, who the hell cares? And AMC does get all the benefits. Robinhood and Vlad are not running interference or running interception.

37:26They are unlocking access on behalf of AMC or any other tokenized stock company and investors who wouldn't otherwise have access, which is the whole rest of the world. The meme coin people get their hands on it first and that's always kind of distasteful for people who are not in the meme coin world. But the whole idea of like neo brokerages and tokenized stocks on permissionless blockchains, enabling access to people who do not have access to US capital markets is a foundational point that should interest every single US company. And I'll all I'm seeing when I see the AMC CEO get upset is that like you didn't ask us permission like you didn't ask us if this is okay, but all of the benefits are almost other than shareholder governance, almost one to one given straight back to the company who has issued a public equity. And so I think this is just actually fantastic marketing for Robinhood and he gets to explain what these things are on squawk box.

38:27And so maybe this is just part of the process that we need to go through for the world to become normalized to tokenized stocks. And this is just what this looks like. Yeah, I mean, they're not tokenized stocks in their ideal form. Right. So, the outside of the US, they're kind of outside US jurisdiction. And this is because SEC rules quite frankly. So we can get tokenized stocks that have all of the governance shareholder rights that the AMC CEO might want. And also, Flashpoint is ETFs don't even have those. I mean, they don't infer a governance right. But the broader point is like, I have no idea why this due to so upset because like, it doesn't affect his existing shareholders. It just broadens his base of prospective shareholders. It's like net benefit. Like there's nothing bad. They cost him nothing. The way I think he's interpreting it is that if they are buying the Robinhood tokenized share, they are not buying my actual equity.

39:28And therefore I get none of the benefits because those things are completely smart. He's a CEO. But that's smart enough. He's smart enough to know this. It seems to be what he is arguing and what this guck box host also don't understand is that these are like near one to one representations and a one dollar purchase of an AMC tokenized stock does equate to a one dollar purchase of the AMC. It's funny. You could find meme coins distasteful, but that was not what his rant was about at all. No, it wasn't about the meme coins at all. Anyways, I hope that this actually does a lot of positive marketing for tokenized stocks and that just adds fuel to the fire of this whole innovation that crypto finally has arrived that we've talked about for like a decade now. Tell me about the open AI case. Did they actually steal from a mathematician? What is the news here? Okay, so there is this like millennium math prize, a million dollar math problem. There's a few of these out there. Like I think six or something. One of them got solved this last week thanks to the work of artificial intelligence.

40:33Thanks to LLMs, thanks to intelligence. The drama here, the debacle here is that the two people working on the problem, Tristan Buckmaster and Levent Alapotaji, sorry, that butchered that last name, they've been working on the problem. There are the two humans working on this problem and they spent a year working on this problem using both anthropic co-work and open AI codex. And so they were working on this problem as humans do, but feeding this into open AI codex. They had published something close to a breakthrough. They were coming very, very close to solving this math problem. And then open AI publishes the solution to the math problem about the same time as they were getting ready to release their paper talking about how close they were. And so this has traded a bunch of drama about why is there a coincidence in timing between these two people who are using open AI codex, almost nearly cracking this case, cracking

41:38this math problem. And then open AI does solve the problem and then releases their solution. And so there has apparently been reports, statements from Tristan Buckmaster, the mathematician who is the human behind this about some sort of negotiation happening between them and open AI about who gets the credit. And open AI is happy to give the monetary prize to Tristan and her co-his co-author, Levent Levent. And they still want to take credit for actually solving the problem. And the claim is that open AI took the inputs that Tristan and his co-mathematician Levent were putting into open AI codex and they were using that as a jumping off point. And then open AI used a ton of compute to basically finish the job and truly solve the problem. There's privacy concerns here. There's provenance concerns here.

42:38And also one interesting bit is that the Levent character is an employee at Anthropic. And so in this negotiation between open AI and Tristan and mathematician, they wanted Levent removed from the credit because they don't want anything associated with Anthropic. And so this has triggered a bunch of people in the privacy world and the just like data sovereignty world to say like, look at what open AI is doing, probably also in Anthropic 2. They are just consuming data and using it to train their models and inform their own processes. And these people are not your friends. They are not your friends. They will take your credit and they will take all of the fame that they can associated with it. Okay. So the soft allegation here from Tristan is open AI basically stole my homework and now to solve this as a result of basically my chat logs with open AI. And there's a word for this that comes to mind in crypto that we talk about all the time, which is the word front running.

43:39This is the allegation is that open AI front ran these mathematicians took their proprietary information. They thought this was a private chat and then actually used it in order to get the prize, capture the notoriety, solve the problem and front run their user base. And I think that's a fascinating way to frame it and certainly brings to light what actually do companies like open AI and Anthropic use the chat logs and data for it by default, David. They can use any of your chat logs for internal training. It's sort of vague. But they're doing it. But like that's the default. You have to turn that off in Anthropic in in cloud, I should say, and also chat GPT. If you want them to not do that. And even then it's like, are they really doing it? It's a pinky promise. I mean, open AI came out and said, we didn't actually use any of these chat logs.

44:41They said we cannot rule out that de identified data drive from their usage of our product helped improve our models. But they're explicitly saying, no, we didn't steal these researchers homework. And it's very difficult to prove. Can you actually prove this? Right. There's such asymmetry in terms of a user's ability to point at a large tech company, open AI. And so you stole from me. And how they supposed to collect proof. Where's, so even the mathematicians here don't have evidence of this. But to your point, it really brings data sovereignty into the forefront. And I mean, is this part of the reason why some things are pumping like the VVV token? Like, you know, so the privacy meta is happening in crypto. It's just like people are realizing big tech does not have your back when it comes to data sovereignty, when it comes to privacy. And you know, you could go with the anti tech movement of like, okay, let's just go back

45:42to paper. Let's not use AI. Let's not use computers. Or you could go to kind of the crypto data sovereignty expression of this, which is just like, hey, use tech, but users retained the sovereignty of their own data. Like that's a message. I feel like it comes from crypto as part of the ethos and is maybe a reason why the VVV is getting the uptick and some of the privacy tokens are doing well. Yeah. There are a couple of things I want to underscore here that I like if you just kind of trying and remove the drama, some things are worth stating. One is that it can be true that when open AI, so at open AI, a team of open AI employers and employees created a prompt to solve the math problem in question. What's the name of the math problem? The Navier Stokes math problem, Millennium prize problem. So open AI team members typed in a prompt to their own model, which I think was also

46:42like an unreleased. It's not even the new chat GBT six model. It's something even more frontier that they have access to that no one else has access to. So they typed in a prompt that was like, solve this math problem. The model, it can be true that the model did not look at user data, but at the same time, the model itself was trained on the data anyways. And so the training can happen. So like when the mathematicians in question, Tristan and Levant, when they uploaded all of their drafts to open AI codecs, the open AI models are able to be trained on that data. But when the open AI researchers or users, the team members typed in the prompt, solve this math problem, it can also be true that that data was not accessed because maybe they were actually, they didn't have their hands on the data. Both of those things can be true. So the LLMs can be trained on the data, but when the LLM is being prompted, it doesn't have access to the data.

47:42That is the gap that open AI didn't really close here saying like, yeah, we're not using your data, but our LLMs are totally being trained on them is the thing that they did not say. Well, it's that benefiting from their data. And you made the point that that's actually part of the business model, right? Totally. That is the business model of anthropic open AI and probably all of the Chinese models, because if you are not using all of the data accessible to you, not the Chinese models, probably not, like because like Chinese models are just their open source, open weight. Anyone can run the inference. I mean, I think it's less so the Chinese models. The point I want to make is that if you are in the arms race of model development, you need to get your hands on as much data as possible. That's right. That's open AI, that's anthropic, and that's probably also Chinese models too. You need to get your hands on as much data as possible. And so open AI and anthropic, one of the benefits of being in the position of being a consumer

48:43product, a direct consumer product is you get to have first access to all of this data. If you are not using that data, you are disadvantaging yourself as a matter of principle to protect your user's data sovereignty. So Dario and Sam are like, I don't care about those principles. I will suck up as much data as possible to improve the product because I'm in an arms race. So that's what's happening. So that's just kind of like the toxic nature of the AI arms race. It is what it is. Also zooming out, AI, LLM, solve this math problem. That happened. And so ignoring the drama about open AI or anthropic and who gets credit and like the humans that did the work, whatever, whatever, whatever, we have a millennium math problem, one of the six math problems that got solved because of AI. And I think it's also worth like, it's it's shrouded by all this drama. Sure. This credit, but it's still cool that AI solving huge math problems. Yes. And we are still not yet at the final capabilities of these AI models.

49:44And so it's worth stating that we are solving very cool problems and the future is going to be sick. And meanwhile, we have all this drama along the way, but it is very, very cool that AI is solving massive data data sovereignty though, right? Like be careful, you put your chat logs with a cloud or an opening eye, right? On their enterprise tiers, apparently, you know, there's the legal contracts where they can't peep into your data. I don't know. There's a lot. But we don't know because once the data gets into the weights, the weight, the model weights of a LLM model are a black box. We don't know what data is in there. We just know that the weights are what they are. And once the data goes in there, you have no way to prove about whether your data got used to shift the tuning of those weights or not. It's a all a big question of who's going to capture the value on top of all of the data. And more and more value seems to be captured by some of these frontier labs. And I think people are rightfully worried about that. Anyways, Venice, the platform that can't steal your data is up 40% on the news.

50:48Also near push through like 20 or 30% up on the week this week. And the near AI cloud platform, if you, listener, are interested in not having this happen to you, this is what Ilya and the near team are have been working on and have been building on like self sovereign user, sovereign AI, user owned AI. And so we, it's cool that in crypto, we have the antidote to this problem all this draw that's happening in the AI arms race. And so near AI near sovereign. So the near AI cloud is built to exactly protect user data. And so shout out to near shout out to our partners in near for helping build that and giving our users protection over their data. Ryan, are you ready to talk about the Hunter Biden laptop? I am, but I think we need to break for sponsors first, don't we? We do. And so we'll give right to the story of the week right after we talk to some of these fantastic sponsors that make this show possible. Some exciting news. We are launching a new podcast to help people figure out the crypto cycle.

51:48How to navigate it? The best crypto cycle investor I know, his name is Michael NATO. He runs the DeFi report. This is the guy that sent me a sell alert before the 1010 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years. And this year we started recording weekly podcast episodes, each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and ether. And where we are in the cycle, there's new episodes that are released every Wednesday, there are 30 minutes, they're short, they're punchy. I think this crypto cycle is harder to navigate than most. So let's do it together. Go subscribe to this podcast, search the DeFi report, wherever you get your podcast, YouTube, Apple Spotify, or find a link in the show notes. There's a new episode waiting for you now. On September 7th, the Wall Street Journal reported that Hunter Biden will be launching a meme coin called laptop on the base chain. About four minutes later after this story broke, Hunter Biden posted the ticker and the date on X with a Fox news clip about said laptop. The laptop Biden said, Hunter Biden said, had been turned into a weapon against him, but

52:52he was turning it into a token, a symbol of resilience, redemption, and recovery. He would go after Trump's meme coin grift, citing nearly a million wallets that had collectively $3.8 billion in losses. And hashtag or ticker laptop, he promised would be different and compensate all the people who lost money on the Trump meme coin grift. Oh no. Oh no. Anyways, after crashing 99%, Hunter Biden had to go to Twitter to defend the launch on X. He blamed a predatory snipers and also claimed that no one on the Hunter Biden team or in the Hunter Biden insider circle were able to sell any tokens, which earned himself a community note, which identified multiple walls receiving 100 million tokens. 10% of this supply before the launch and sold them all. Okay. So if I had to just give you a formula starting with the Libra coin, it's an insider wallet,

53:56blame snipers say you're doing this for some positive reason, the Libra coin, the Argentina coin. The delay, yeah, the delay, but I don't want to blame delay because he was just kind of a useful idiot, unfortunately. But like we've seen this movie so many times before we've seen this movie. Yeah, we like say we're doing something good, blame snipers. There's insider wallets that get allocation early. They sell the person in question says that the team is locked up and can't sell the token dumps 99%. It's like, I if you wanted to write the most normal movie about a shitty meme coin launch and have nothing change whatsoever about the formula, this was it. Yeah, he just swap out the political celebrity, whatever with someone else. That's watch it totally, totally depressing depressing stuff, David. Do I also why go against literally the world's greatest meme lord, Donald Trump with a meme

54:57coin like you're going to lose. Metamask is spinning out of consensus, which is interesting. Metamask of course was part of consensus consensus, kind of a an early Ethereum conglomerate, but they had an enterprise structure with their L2, Lenea, Bezoo, all their institutional products. And then they also had this wallet, which is the Metamask wallet. They are now splitting those two things into separate entities. The Metamask is now off on its own. They're going to focus on the consumer use cases. So Metamask rolled out like a mastercard type product. Do you see the future of that's going? It's kind of like consumer, FinTech meets crypto wallet. They're boasting, how many users do they have? Like 30 million users? It's how many users? The most, yeah. On the Metamask side of things. And then everything else is staying within consensus. Joe Lubin is actually going to be the CEO of the Metamask product.

55:58100 million downloads was the stat I wanted to give. No mass token in the announcement. So don't know if that's coming, if that's ever coming. That has been a rumor for a lot of years. But big news that Metamask is now splitting out of consensus. IPO? I don't know. I mean, there've been rumors for a long time that consensus was going to IPO. This might be a step towards that. Consensus IPOing without Metamask is much more why. Metamask and one or two in Fira is the whole pie. And so Metamask, I've mentioned this on the podcast many times before, is a auditing mess, if you will. They started in 2015. They paid their first employees with Ether. They didn't have payroll. There was no books. It was a complete jumbled mess in the beginning. And I'm sure that that is just kind of unresolved because of how much of a spaghetti unorganized

57:02mess that consensus was in the first few years. I'm sure that they have shaped up. But going back and fixing that is, I don't really know how to take a company public. It's far easier and cleaner to spin out the things of consensus that make money and then have liquidity events on those things. Maybe that's what they're doing. Maybe there's going to be a Metamask IPO is what you're saying. Metamask IPO in Fira IPO, IPO, IPO these things individually. And that's how Joseph Lubin and the consensus equity holders get their liquidity event. There was some news on the week from the Ethereum world about frame transactions. I think Vitalik put out a post. This is a feature that is going to be a headline feature, not in the next hard fork, not in Glamster Dam, which is supposed to still happen this year, 2026. But the one after that, a HogaTah, it's called in 2027. And frame transactions are going to be a headliner, a feature of that HogaTah hard fork.

58:05Vitalik talked about it. Can you simplify it for us? And you're pretty bullish on it, actually. Can you tell me why? Account abstraction. We've had account abstraction as a subject in Ethereum land for forever. And Ethereum layer 2s tried to beat the Ethereum layer 1 with account abstraction. Account abstraction is a smart wallet. It's actually kind of hard to explain because it's conceptually very different. It is an alternative to externally owned accounts. And so rather than having a dumb wallet, kind of in the same way that Bitcoin is kind of like a dumb blockchain. It's like a simple blockchain. And Ethereum is a smart contract blockchain. It's probably owned accounts, which is your ledger, your Metamask, your normal wallet. It's a dumb wallet and account abstraction. It's a smart wallet. It's a pro-glamophone, right? So you could do stuff like programmable. You don't have to pay gas and eth anymore. You could pay in whatever token you have, including stablecoins, an application can sponsor the gas fees. You could have gas list transactions.

59:05You could have past keys as sort of the private keys during signings. You can batch transactions. You can swap out private keys. You can have the same address, but a new private key, which is how actually a much of Ethereum can become quantum proof, quantum resistant. We were talked about like near two months ago or so becoming quantum resistant first. It's because they had this structure. Right. And so you can easily swap out a address or a private key and have your front end address be the same. So that's what the real transactions are. So the limit list as to what you can do. Yes, that's what the free transactions are. And it's coming in Hobita. I guess I feel like we have been promised or we have talked about account abstraction in so many different ways over the last like 10 years in Ethereum. Right. At some level I'm like, okay, cool, but why has it taken so long to get here and why is this now being prioritized? Do you have any thoughts on that? It was always prioritized in some sense.

1:00:07It was always destiny to have merged into Ethereum in the future. Why did it take so long? Because Ethereum is a startup mentality or because Ethereum and the EF development is a nonprofit mentality, not a startup mentality, it would have been far better to have had account abstraction during the wave of mass building in crypto during 2020 through 2022. Having those synergies aligned with having all the builders plus account abstraction would have been phenomenal for the development of not just Ethereum, but the industry at large. It's a shame that it has been taken so long. It has a shame that crypto as a whole and Ethereum as a whole has been as taken so long. Why is it taking 10 years? Because Ethereum is a decentralized system. We needed to argue on standards. We didn't have as much data now as we did then. I think on account abstraction that people forget there were like precursor EIPs to this, like multiple things. Do you remember there's the ERC 4337, which is just basically a wallet would have to adopt it.

1:01:09That would be more account abstraction. The adoption levels never really took off. It didn't really become the default choice for wallets. But at least that tested out the idea of smart accounts and programmability and how that would work inside of the Ethereum network. I feel like now that we have those building blocks in place, there's more, it's battle tested, I suppose. Now they can go all in on frames and just make it part of the core protocol. But the big reason I think this is prioritized, David, is because you're going to need to replace signatures due to quantum. The signatures in Ethereum are not quantum secure. Those have to be replaced. Ethereum also, the EF came out this week and said, by 2029, we want to have the entire Ethereum stack quantum secure. That's a lot of things to replace. This is one of them. This I think is why the EF has prioritized it. I don't think it was because of better UX.

1:02:12I think they haven't cared about that as much as other things. I think it was really quantum signatures that kind of pushed it as this, like we have to have this in order to get to our deadline in 2029. That's how I read it. Yeah. I do remember talking. For which EF researcher it was when the first iteration of account abstraction got merged for 4337, account abstraction had been discussed in 2016 and 2017 and 2018. Yes. Then it got put onto the shelf and then it finally had its first implementation in 2023 with 4337. One of the researchers, the quote that like, residies in my brain, was like, this just proves that there was no good reason for why we put account abstraction on the shelf in the first place we could have had this forever ago. And that was in 2023. Yeah. So like once again, it could be the dead horse to answer your question. Why did it take 10 years? There's no good reason. Yeah. There was no forcing function other than quantum.

1:03:13Right. Right. Well, I guess glad we have quantum as a forcing function. I'm not sure. I'm not sure the reason. But getting it next year, that is the big news. David, let's end with this. So next week, the Clarity Act, its Door Diet Week, they vote on a cloture, odds on Paulie Marker, are about 15% right now. People think it's going to fail because that it passes. 50% that it passes. So the odds of failure are 85%. The reason is because the ethics language hasn't really been, that bridge hasn't been crossed. Probably the Democrats also just don't want to throw another bone to crypto or to Trump any of the things on his agenda prior to midterm. So I don't think this is going to happen. Are you bothered by this or like, hey, 15% is not zero. 15% is like, it's possible. We'll see how it goes. We'll see what goes next week. We'll see what happens. Bank of the station, thanks for sticking with us another week.

1:04:15Hopefully this is the start of a very long and glorious bull market. And if it is, we will be here along the way. Crypto is risky, however, but not risky enough. The institutions are landed. So we are going even further west. This is the frontier. It's not for everyone, but we are glad you were with us on the bankless journey. Thanks a lot.