Bankless - 44 - The Bull Case for Ethereum | Eric Conner, Anthony Sassano, DC Investor

Episode Date: December 21, 2020

🚀 SUBSCRIBE TO NEWSLETTER: http://bankless.substack.com/ ✊ STARTING GUIDE BANKLESS: https://bit.ly/37Q17uI❤️ JOIN PRIVATE DISCORD: https://bit.ly/2UVI10O🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ 👕 BUY BANKLESS TEE: https://merch.banklesshq.com/ -----GO BANKLESS WITH THESE SPONSOR TOOLS:  ⭐️LEDGER - BEST HARDWARE WALLET TO SECURE YOUR CRYPTOhttps://bankless.cc/ledger 🚀  ZERION - INVEST IN DEFI FROM ONE PLACEhttps://bankless.cc/zerion 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDShttps://bankless.cc/monolith 🤖YEARN - YIELD-SEEKING MONEY ROBOT THAT FARMS DEFI FOR YOU http://bankless.cc/yearn ------44 - The Bull Case for Ethereum  Guests:  Eric Conner, Anthony Sassano, DC Investor  These three gentlemen are close to the beating heart of the Ethereum universe. They all pay attention to undercurrents of what is transpiring in Ethereum.  What are the factors that contribute to bullishness on the Ethereum economy and ETH the asset? We ask our guests how they characterize the relationship between Ethereum and ETH, the interaction between scaling Ethereum and EIP1559, as well as the potential for NFTs. All, of course, underpinned by DeFi applications making the magic happen.  Tune in to hear the bull case for Ethereum from good representatives from the Ethereum community------Don't stop at the video! Subscribe to the Bankless newsletter programhttp://bankless.substack.com/ Visit the official Bankless website for resourceshttp://banklesshq.com/ Follow Bankless on Twitterhttps://twitter.com/BanklessHQ Follow Ryan on Twitterhttps://twitter.com/ryansadams Follow David on Twitterhttps://twitter.com/TrustlessState -----Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time we may add links in this channel to products we use. We may receive commission if you make a purchase through one of these links. We'll always disclose when this is the case

Welcome to bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. David, this is a holiday special episode. How to go? Three of my favorite eth bulls, who I have learned so much from throughout my time in Ethereum, I'm so, happy to have gotten them on the bankless podcast to have a nice holiday discussion about our favorite asset ether and our favorite economy Ethereum. We think that this is going to be a fantastic episode for you guys to listen to while you guys are at home with your and family. So you can hear the familiar

voices of DC investor from the ETH finance discord and then also Eric Connor and Anthony Sizzano from the ETH Hub podcast. I had this a fantastic time talking about all the amazing different features of Ethereum and Ether, the asset. And I'm sure this is going to be an absolute blast for you to listen to as well. If you want to stop spending your Fiat on Ether, this is not the podcast to listen to you. David, I feel like we should put a warning above. This is very bullish material. It's not for everybody. Not everyone can handle the bullishness in this episode. It was an absolute blast recording it. So let's just go ahead and get right into the episode. But first, we're going to talk about some of these fantastic sponsors that make this show possible.

When you own crypto, what really matters is the security and ownership over your assets. Being a part of the bankless nation means having complete sovereignty over your crypto. The easiest way to do that is with a ledger hardware wallet. A hardware wallet is a little device that manages your private keys for you, so you don't have to worry about proper private key management. Your ledger hardware wallet keeps your private keys private, but still lets you have easy access to your crypto. The combination of my ledger hardware wallet and Metamask,

lets me store my crypto assets in the most safe way possible, but still lets me easily access Uniswap or all the other defy apps that I use on a daily basis. If you already have a ledger wallet, you can use the Ledger Live app to participate in some of the money verbs that we discuss in the Bankless program. The Ledger Live app is your headquarters for managing your personal crypto finance. It's a great tool to manage the assets you hold on your ledger, as well as receive a portfolio summary of all the assets. that you have stored. Using the Ledger Live app, you can buy Bitcoin, Ether, and stable coins and have it sent directly to your Ledger hardware wallet, skipping over the trusted exchanges

and getting your assets into your control. You can even use the Ledger Live app to swap crypto assets natively inside of the app, so you never need to send your crypto assets away from your ledger to make a trade. Buying a ledger is like buying a fire extinguisher. The best time to get one was yesterday, especially if you're doing something silly, like holding your crypto in a hot wallet that's always connected to the internet. If you haven't gained full control over your crypto yet, go to the link in the show notes and get your ledger today. If you are looking for the front page of Defi,

look no further than Xerion.io. Xerion is your home base for managing your defy portfolios. Zirion offers a central place for you to engage with all of the defy protocols and assets that you engage with on a daily basis, but all in one central spot. I've loaded up a wallet, and Zirion is giving me the portfolio performance of all the assets in this wallet over time, as well as a breakdown of all the assets that I own, as well as all of my transaction history that I've ever done

in an easy-to-view fashion. Zirion also lets you invest right into DFI's best yielding financial opportunities right from their homepage. Zirion also makes it super easy to access interest in DFI using applications like Compound and Avey in the background. You can also exchange your assets using the Xerion app using an exchange aggregator in the background to make sure that you always get the best rates. You can even use the Zirion mobile wallet to add your Metamask or Argent or another Ethereum address right into your mobile wallet so you can see your portfolio and engage in Defi on the go. Here I just loaded up my Argent wallet and now I'm going to load up my Metamask as well. And Zirion will do the same thing. It will add all of my assets and wallets together

all in one space and give me a portfolio summary of what's going on. Adding wallets is trivially easy. If you already have a metamask, you can get it right into the Xerion app, and it can sync with your desktop app as well. And the best part is you can also buy ether right into the app itself. Use the invest tab to look at all the things that you have invested in, as well as other opportunities. And coming soon to the Zirion app is the ability to buy and sell your assets straight from your mobile device. So download the app. It works on iOS and Android. Go to zirion.io. Plug in your wallets and get a historical report. of your portfolio over time, as well as a comprehensive breakdown of all the assets that you

own and how much yield they're generating for you. Bankless Nation, we've been waiting for this episode for a long time. We have got the three most bullish people we could find, other than David and myself, about ether on today. We've got Eric Connor, Anthony Sasano, DC investor. These folks were bulls when it was not popular to be bullish, Eath. They've been through the trenches. of the bear market. We are out the other side in what looks to be the beginning of a bull market,

and we are here to talk about why they are bullish, Ethereum, the network, and ETH the asset. Gentlemen, fantastic to have you on bankless. How's everyone doing? Fantastic. Thanks, Ryan. Doing good. Thanks for having up. Doing great. You know what? I'm going to start actually with D.C. So we want this to be kind of a canonical Ethereum episode that people can refer to. and that provides some context on what Ethereum and Ether actually is. Could you kind of start us off? D.C., what is Ethereum to you?

How would you explain it to someone off the street? Well, off the street is a tough ask, but I'll do my best. And the way that I think of Ethereum is that it is a network that provides a programmable and globally shared ledger of record. So it's kind of like this, it is this database. for really important fiduciary grade data, which everyone in the world can access and anyone can write to permissionlessly and in a censorship-resistant way. So that at its core, that's what it is. But the real question is, what does it allow? And I think what it allows is it allows this

economic coordination across anybody, anywhere in the world. And that's a really powerful concept. And you see that embodied in modern-day defy as well. And as far as the types of properties that Ethereum has and what it could mean, I think Ethereum will become home to the world's most important digital assets, the ones that really have financial value. And most importantly, it's home to Ether, which I believe, and I know we're going to talk about today, is going to become the world's most important programmable decentralized asset. In fact, I think it already is. And that programmability is why I think eth is also going to emerge as a very important macro asset alongside Bitcoin, as we've already seen. seen. And I think it's kind of in a class of one or two. And we're already seeing that with billionaires piling in to Bitcoin and into Ether and now we're seeing CME future. So the path

for Ethereum looks incredibly bright. D.C., do you think it's hard for people to get their heads wrapped around? With Bitcoin, there's just one name, right? You say Bitcoin, it's a network. It's also an asset. But with Ethereum, you sort of have to explain, okay, well, there's this thing called Ethereum the network and just as you explained it. And then there's this other thing called Ether the asset and both are important. Is the Ethereum narrative just like hard to understand? Or do you think this cycle, people, mainstream investors will begin to understand why both the network and the asset are important? Yeah, I mean, I do think in some ways the narrative is certainly harder to understand than Bitcoin.

And Bitcoin is a pretty simple narrative. It's a scarce supply censorship-resistant digital asset. And I think Ethereum has some of those same properties as well, but Ethereum does a lot of other stuff. And I think the concept of like what is a smart contract and what does that enable is difficult for a lot of people to understand unless you get into the technical details. So at its core, you know, when I really think about it,

I view Ether as programmable money. and I think that, you know, I've discussed it that way with some people outside of the space, and I think that resonates with them. It's this decentralized programmable money where you can run applications that no one controls, and you can manipulate that value to do all kinds of incredible things. I do think that the space is also going to become more sophisticated during this cycle. I mean, it took people a cycle or two to really understand Bitcoin. Let's not forget that.

And I would argue that it was really only in the 2017 cycle that people really came to understand what Bitcoin is. Prior to that, it was kind of more of a play toy for nerds. And I think Ethereum has been at that stage, but we're about to hit this moment where Ethereum is going to enter the zeitgeist during this cycle. And I'm really excited about that. I think what DC just said is important to understand. And like I'll go, you know, yeah, it's been six, seven years on the Ethereum journey now. And I think what we've realized is it takes narratives a while to not only be realized, but to take form. So Bitcoin's been around over, what, 10 years now or something like that.

And they kind of went through these different. At first it was like peer-to-peer cash. And then like it's gone through these like seven narrative changes. One of the most fascinating things to me about this current bull cycle we're going on is Bitcoin has seemed to have won the digital gold narrative. And I, you know, that's cool. we're here to talk about Ethereum though, but what can we learn from that? It's that that narrative in DC was just talking about this was not really understood until basically today. It took them four or five years to figure that out and for the mainstream to adopt that. And I think

Ethereum is two to three years behind in the defy narrative. And I think personally that the defy narrative is 10 to 20 times more powerful than the digital gold narrative, but it's also a little bit more complicated, right? And I've recently been saying and tweeting and thinking about, you know, how do we explain Ethereum to people? I think of it as think about the internet, but the internet for finance. And Eath is that money used on the internet of finance. And I think as we kind of hone in onto this narrative, and a lot of people will say, you know, it's complicated to explain, which it is, you know, why isn't the narrative perfect yet? It's because we're still pretty young, right? And like, even once you find that narrative, you need to kind of like have other people understand it and,

you know, sell it's maybe not the right term, but you do kind of have to sell it to people that don't understand it, right? So I think, you know, to me, I've said before multiple times when I first saw Ethereum, this concept of defy, this concept of financial money, you know, being transacted easily across the internet was what captured me. It wasn't the world computer. Maybe that's 10 or 20 years down the line. But I think a theorem's growing into its own and that we have found our narrative. We're kind of like, you know, sculpting it now and like soon, we're embarking on the early stages of pitching it and what it is. And, you know, it's not just a marketing tactic. Like, it is powerful. Being your own bank, having someone not tell you what financial transaction you can

do or, you know, and not like shutting you down or whatever, like that is extremely powerful. There there was debates on Twitter today about what is cypherpunk. I don't think Bitcoin's cypherpunk at all. I think cyberpunk is having true privacy solutions being your own bank. Bitcoin offers none of that. They can be digital gold. That's fine. They're layered to banks. But Ethereum's looking for something bigger. It's just going to take a little longer to get there. And I'm totally fine with that. Anthony, so Eric's saying so is DC that if you're in ether is sort of a, maybe a cycle behind Bitcoin in terms of its narrative understanding, maybe three or four years. Would you agree with that? And what would you ask?

to you the definition of Ethereum and Ether. Yeah, I would totally agree with that. And I think it's not even just in terms of like narratives and awareness. It's also in terms of, in terms of like, I guess, price and market cap of these kind of assets too. It seems that if, you know, just looking at the charts seems to be following, you know, Bitcoin's last cycle. And it's just, it's crazy when you look at it like that because the, you know, the supplies of the coins are different. It's not like a one-to-one mapping, right? but magically the prices are similar, right?

And it seems like we're just one cycle behind in terms of like, I guess, price, but awareness as well. And I've been saying this for a little while now, but I think, you know, Bitcoin owns the macro narrative, right? You know, when you think of crypto as someone outside of crypto, you're thinking of Bitcoin. That's the first thing you hear about. It's the first thing you're going to go and investigate. You're going to learn about.

And it's a much easier thing to wrap your head around, right? But then once you venture into crypto, pretty much every. everything is happening in Ethereum, right? Bitcoin becomes the boring asset or the boring network within crypto. If you want to get involved and get more excited about something, then you venture onto Ethereum, then you fall down that rabbit hole and you have defy, right? Which is just another, even rabbit hole within the rabbit hole. So that's kind of what I've been kind of explaining to people, especially newer people that I talk to, is that get to learn about Bitcoin, get to know Bitcoin, understand what it is and then go and venture into Ethereum and you'll never go back.

Like I don't see how you can fall down the Ethereum rabbit hole and then go back to being only Bitcoin after that. You know, maybe there's a few people that have done that, but the majority of people that I talk to don't. And that's just better, that's just going to increase the awareness of Ethereum and increase kind of like the social consciousness of Ethereum. And we're going to have more and more people being evangelists for it. And then it goes from like Bitcoin being the only kind of thing that the media talks about, the mainstream media at least, to Ethereum being alongside it. And I think we're already seeing that happen. DC kind of mentioned that these billionaires are investing in BTC, right?

These funds and everything. But they've also investing in ETH. If you had told me a couple years ago that this would be happening for BTC, I would have said, yeah, that makes sense, right? I can kind of see that. For ETH? Oh, God, no, no. two years ago,

ETH was viewed as a joke, right? As an asset, because we just came off the ICO boom. It was a bare market. ETH was getting kind of like destroyed in that market. And if you had told me that billionaire fund managers was going to be buying ETH alongside BTC, that would have been a crazy notion.

So I guess I think we've already come so far. And I think that it's not going to take us as long as it took Bitcoin because we have that kind of infrastructure already laid out, that consciousness already laid out. You know, crypto to the mainstream is now becoming like an inevitability. It's not like, will it work? Is it a fad or stuff like that? People are accepting that they were wrong about Bitcoin, right? They were wrong about Bitcoin going away and going to zero, and they're capitulating. And I feel like that's going to happen with Ethereum a lot

quicker because people aren't going to get the wrong idea. They're already going to accept that these networks can exist. And then once they say Ethereum, they're not going to have those initial doubts anymore. Then they're going to be like, oh, okay, this is like Bitcoin, but you can do all of this stuff with it. So I think, yeah, we're one cycle behind. But, but it's going to be faster to play out at this point. So each of us have mentioned price a few times. And in kind of your intro, Anthony, you were talking about price, maybe price being sort of a market cycle behind Bitcoin.

But some would argue that, like, in Ethereum, the price of Eath doesn't really matter. And I think there have been elements of the community, even the Ethereum community that have argued that over time. Like, Anthony, don't worry about, like, don't be focused on price. Price doesn't matter for Ethereum. It's about the technology. It's about the network. What is your response to that?

Does price actually matter? And if so, why? Yeah. So if we take this price doesn't matter to its logical conclusion and you think, you know, money doesn't matter, right? Money doesn't buy happiness. Money is an important, right? That makes sense to me.

But my pushback is that the money within the ecosystem, as the number goes up, we have more money to build things with, right? We saw after Defy Summer, there was a couple months where a lot of people made a lot of money. And then it was funny, I was talking to Eric about this on the Ether podcast. Like, we were talking about fundraising, you know, multiple projects fundraising every week after that happened, right? And why do you think that happened? Because people had more money.

Like, it's not a hard thing to grasp. If people have more money, if people feel richer, they will reinvest that money. They're not just going to sit on it like some dragon hoarding its gold. like and i and i think you know that that kind of plays into uh basically number go up being so important for for the ecosystem just for that reason alone but there's also a bunch of other reasons right like the security of the network goes up if eats price goes up right that's a fact you cannot you cannot argue against that uh in my view right um you know it brings in new users as much as you know for better or worse it brings in new users and maybe they come for speculative reasons

they stay for other reasons later on i mean i'm sure I'm not alone in saying this, but like I first got into it because I saw the price of, you know, kind of ETH going up and I was like, wow, okay, I want to buy some, right? Before I even like jumped down the rabbit hole in 2017, I kind of bought it and then jumped down, right? And the reason why it came on my radar is because my friend told me, hey, you know, this ETH thing is going up. You should look into it, right? So that's how a lot of people will get into the ecosystem. So if you're a builder, right, I actually see this rhetoric a lot from like developers and builders and things like that, not to generalize, but that's who I kind of generally see it from.

But if you're that kind of person, just think like, okay, you know, how are you going to get funding for starters for the stuff that you're building, right? If there's no money around, then you're not going to get funding for it, right? And you want more users to come into the ecosystem so that they use your apps. So, I mean, it just, for me, it's like second nature to know that that price matters. But I, and I can't kind of square why people just don't think it matters, even if you think that money doesn't matter. It doesn't matter. Like, you personally can still hold that belief. You can think that money isn't everything and that's fine. But not everyone wants number to go up just

to buy a Lambo, right, or anything like that. Like, you know, for me personally, I made some investments after DeFi Summer as well. Like, I want to give back. I donate it on Gitcoin. You see so many people donating on Gitcoin. The rounds are the biggest they've ever been, right, in terms of matching. So I just, I don't see how number go up can be viewed negatively unless you view it with the lens of, oh, everyone just wants to buy a Lambo, everyone just wants to be rich and do extravagant things, which I think, especially within the Ethereum community, is not true because we reinvest the money and we see that happening kind of every few months when the cycles play out. So yeah, I guess a long-winded way of saying

that price matters pretty much more than anything, but not for the reasons that a lot of people think it matters. An Ethereum or crypto-sceptic could illustrate, and I've seen this illustration before of Ethereum, is that it's not this like internet-native economy. It's more, of like this this kind of like private park where there's a bunch of like you know financial fun games being played like it's a it's a it's a casino it's like it's not really globally accessible and you know it's more really really niche and it's not it's not really going to be like this world financial platform it's more of just like this kind of like money theme park that lives on the internet and it's just a bunch of toys that that's that's a defy skeptic or a theorem skeptics

take that i've heard um and the and so i want to ask the question is like when, when, you know, ETH price goes up and we're seeing all these seed investments into these DFI projects, into these different, different Ethereum protocols, into these things that are going on in the Ethereum economy. What are these things? Like, what are these, every single entity that is receiving funds are trying to solve a problem, right? And so when we view them holistically, what are these problems that we are trying to solve, right? Like, what are the problems that Ethereum is trying to solve? DC, let's turn to you. Like, what are the overarching problems that these people that are fundraising for projects or just building something on Ethereum,

like generalized, what is the problem that, you know, each individual team or project was trying to go after? So I think one of the crazy things about Ethereum is the breadth of problems that are being tackled on the platform. And some of those efforts are going to be successful. Some of them are going to be failed experiments. And right now, we don't know which ones are going to be which. But I think fundamentally something that Ethereum tries to achieve is to remove this reliance on intermediaries, which we have become very accustomed to in our financial lives and other parts of our lives as well. And when you think about the proliferation of entities like banks and how difficult they can be to deal with, other financial institutions, they can be inherently unreliable.

And beyond that, it can also be difficult to do things between them, right? And so when you're working with a financial institution in a given type of account, oftentimes that account can't quickly talk to your account at a brokerage or something like that, right? And so you've got to send the money through some antiquated system, which can take days or on the weeks if things go wrong in some cases. And I think that is a problem because those intermediaries also extract rents in that process. and not to say that they don't provide value for service, but if we can do that cheaper, more reliably, more transparently on Ethereum, then why wouldn't we want to?

I think the other problem that Ethereum solves is that it creates this new, I wouldn't say it's a problem that it solves, but it creates this new opportunity with Ether as an asset in particular. The world has never seen a programmable, decentralized asset with the characteristics of ether, and especially when,

I know we're going to talk later about like EIP-1559 and Feeburn and staking. I mean, that asset alone is going to create the potential for all kinds of services that, frankly, we can't imagine yet, right? I mean, who could have imagined, even if you read the Ethereum white paper, would you imagine that something like dye from Maker would exist, you know, a few years later, based tapping into that decentralized value to create something and transmuting that value into something else. So, and I want to kind of riff off of what Anthony was talking about with respect to price.

Price is important because it's liquidity. And liquidity in the system in the Ethereum economy allows us to do more things and do more impactful things that are relevant to the world. I'll add a little bit here. So it's, we always kind of think of like, what are we building for the end user, right? And I'll use this. I ran across this hacker news post. Most people listening probably know what hacker news is.

it's a pretty popular message board among like developers and I guess hackers, right? And it was like someone posted like, why, why does every developer I know these days somehow have a connection to Ethereum? And that like really hit home with me. And I think like when we talk about defy and like open finance and Ethereum being open, we should also realize that like not only are we building for the end users to be bankless and be able to, you know, transact however they want, but it also gives the. ability for anybody sitting anywhere in the world to build a financial platform, to build a money

Lego. Like there's no barrier for anybody, right? And like now you kind of need to be connected. You need to know like some accredited investors, some VCs and raise some money. You need to like have ends in the banking industry. Now some kids sitting in some random country 15 years old or whatever can fire up a piece of code and it becomes an essential money Lego on Ethereum. And I think like that is just as powerful as, you know, having censorship-resistant transactions and being your own bank and things like that. And I, you know, I think the power we're really seeing is just this, like, crazy reach that Ethereum has. DC just said it. Like, we're tackling so many use cases on chain. But the fact that anybody can just spin up a line of code, no one's telling them no,

is just fascinating to me. And I've been thinking about that post I saw on Hacker News for the last few weeks, and I think it speaks to, I really do think almost all, like, younger developers have some toe dipped in the Ethereum ecosystem at this point, which is just insanely powerful. So, Eric, like, as we're maybe getting into Defi a little bit and kind of the Ethereum economy, it seems very much that Ethereum's destiny is at least partially tied to the success of DeFi, right? There's also some competitors to Defi, too, right? So if you think about, say, the Bitcoin ecosystem and doing things on Bitcoin, a lot of the money verbs, as we might call them, on bank lists that you could do on Bitcoin, you do generally through a crypto bank, right?

Through like a Coinbase or a Gemini. Coinbase is now recently launched. It looks like the intent to IPO. That means a larger war chest that they'll have at their disposal. How do you think this defy ecosystem of startups with some of the strengths that you mentioned, but also like the weaknesses, right? I mean, these are like small developers, not necessarily a lot of budget, harder. In some ways, user experience at first, there's private key management, that sort of thing. How can they hope to compete against the crypto banks? Do you think DFI versus crypto banks, do you think DFI can come out ahead?

Yeah, it's definitely an interesting battle to talk about it. And I've always said, I think these universes are going to run in parallel for a while, mainly DFI versus traditional banks. But I kind of, I'm putting Coinbase in those in the traditional banking industry at this point. Like to me, they're kind of just banks, right? They're more modern banks, these crypto banks. I think, you know, it takes like having a bad experience in a traditional, finance system to really start to understand the benefits of defy. So I don't think as like, you know,

someone that lives in the U.S., the first world country and doesn't have too many issues with banking and finance right now other than, you know, I graduated around the time where the financial crisis going through here and it was hard to find a job. Other than that, you know, my banking life's pretty easy. Now, I think we like kind of get locked into this bubble sometimes of, wait, why would someone want a Bitcoin as a hedge to a monetary policy? Why would anybody want defy? There's a lot of people in the world that have hyperinflation currencies that struggle to access a banking system, right? So I think it's going to start there and grow.

Like, you know, I guess in the U.S. we could have inflation. We could have weakness in the dollar. We're starting to see a lot of like censorship around traditional financial transactions, regulations coming in. Those scenes can slowly creep in. And I think it's going to take like the younger generation to realize the benefits. and it's going to be the slow wave, right? I don't, I've never been one to expect like the next year is going to be like where Defi takes over, right?

I think this is a long play of these two systems running and slowly people start to see the benefits. And just with some of the younger generations finding benefits like technology and mobile apps and all this stuff that we've all witnessed over the last 20 years, they're going to slowly start to realize the benefits of, you know, being your own. bank and having privacy and all that kind of good stuff. So David Letterman had Bill Gates in like 1994 and there's a clip on YouTube where like he's asking Bill Gates about the internet, right?

And Bill Gates is kind of describing like, what do you do with internet? Bill Gates says, well, like, who knows? You can watch videos on it. You can listen to music on it and Letterman says something like like music. Like do you mean like a radio? I mean like I already have that. So the audience laughs, right? but what he couldn't picture back in 1994 is something like Spotify that access to the entire

world's inventory of music on demand wherever you want it right maybe turning the question to anthony's do you think that this is some of the promise of defy two that like we've just invented these primitives that you guys have been talking about these new money Legos right and so we have the potential to leapfrog traditional finance and banks and their capabilities with this whole new thing that we've unlocked called programmable money we haven't even seen the full extent of or can't even imagine the full extent of what's possible do you think there's an element of truth there and are there any examples that come to mind yeah i mean i think about this quite often and you use the good example there with bill gates trying to describe the internet i think in that

moment or around that time, Bill Gates was like, this internet thing is going to change the world. I just don't know how. I know it's going to change the world. I just don't know what way it's going to, right? And he couldn't really articulate it too well to people that were still stuck in the old world mindset. Right. It is definitely a mindset thing. It is something that it's kind of like a virus that needs to spread to, like a mind virus that needs to spread for people to kind of accept a new paradigm. And that's what the internet was, right? And then, you know, 20 years later, I'll take, like, oh, that was obvious, right? Of course we're going to have music on the internet. Of course we're going to have Spotify.

You know, of course we're going to have YouTube, which is one of the biggest sites in the world. So I think with Ethereum, we're in the same position now where we all know that there is something here, right? There is something special here. We know it's revolutionary. We see the revolution playing out in front of our eyes, but we can never quite pinpoint how it's going to play out or what the next killer app's going to be, right? You know, even like something like uniswap, which everyone thinks is obvious. You know, always. automated market makers have been a thing for like decades. Like this is not a new concept, right?

It's just that they didn't work before. But now that you have a neutral kind of composable atomic infrastructure like Ethereum, automated market makers are the best thing you can build on Ethereum at this point, right, in terms of product market fit. And, you know, even people that created Ethereum like the Talek, right, and the core team, they would, I mean, they wouldn't have been able to tell you exactly how it was going to play out. Like no one saw Defi coming, but they knew something was special was here.

They knew building Ethereum was going to enable something special. They knew that decentralized applications were going to work, and they believed that. And they just, they couldn't, yeah, they couldn't articulate it to like, to basically give like any accurate predictions. And I don't think we can at this point either give, give too accurate a prediction. Like we know DFI is going to be big. We just don't know how it's going to play out. We don't know how it's going to enter into the mainstream consciousness. we kind of have, you know, theories that centralized institutions will build on top of these

decentralized protocols, which I actually think is how it's going to play out. But we can't say for sure if defy will usurp kind of C-Fi as it's known, or TradFi, for example. And I do agree with Eric that there will be parallel worlds for a while. People, some people, or at least maybe maybe even most people, will always prefer that kind of like security of centralization, for example, and that experience, but the optionality is there to opt out of that. Just like the internet gave you the optionality to opt out of a lot of centralized kind of things, right? You don't have to use Gmail for your email.

You can have your own email server because it's on a neutral protocol, right? You can do all these sorts of things. You can basically run your entire life off centralized institutions on the internet. Yes, your experience may be a bit worse, right? But you get that kind of sovereignty back. I think that's the same for Ethereum, and with DeFi, but I also think that DeFi is going to offer a better product than any of the centralized institutions can offer for the sole reason that defy on Ethereum, all the apps and everything

are open. They will all talk to each other. Centralized businesses don't want to open themselves up to other centralized businesses for competitive reasons. They don't want other businesses coming in and seeing all their data and being like, oh, I can see what you're doing. Okay, this is how I'll compete. This is how I'll outcompete you, for example. So it's just too. different, completely different worlds that we're seeing play out. And I mean, my belief is that defy wins out in the long run against these centralized institutions. It's so funny because like, like back in 2019 or 18, before kind of the birth of defied, we started to see these use cases take hold. This is part of the reason it's been hard to describe Ethereum, right? Because

you inevitably say something like, yeah, this is a, you know, an open finance or open money system and it's going to change everything about the world. Right? And somebody looks at you and thinks like, well, show me the use cases. You're crazy. And by the way, you have to say like, I don't know how it's going to change the world. I don't know what the actual applications are going to be, but I know it's going to change everything, right?

That's what's difficult about the Ethereum narrative sometimes. It's, it's just such a blank canvas and such a white, like open field of potential that we can't even predict what the next step. Yes. The way I've been kind of illustrating the uniqueness of defi is as a as a platform is that in, when it comes to building a money Lego, builders have two options. They can build one brand new from scratch or they can build another one that connects other money Legos.

And that's exactly what Anthony was just saying with like all of traditional finance, all of centralized finance is a bunch of walled gardens. And so they only had one option available to them, which is build something from scratch. Nowhere in centralized finance is the ability to build a new company that is fundamentally based off of other companies, right? They're very little surface area for that. And that's, I think, what Defi is really optimized for is builders who want to build off of other things, right? Like that second option of like, I will build a brand new money Lego using other money Legos. And that's something that I don't think can be replicated.

based off of the legacy market. Would you guys say that that's one of the, perhaps the prime feature of defy that makes it such a thing that can grow so quickly? Yeah, no, I would definitely agree. I mean, if you think about the composability is absolutely insane, right? The fact that you can, I mean, just,

all right, let's take like the yield farming craze, which I know has a bit of a, you know, people who are maybe burnt out on it or whatever. But just think about the fact that Uniswap LP tokens became something, right? So you're providing liquidity at Uniswap, right? And all of a sudden Uniswap came along and said, hey, what if we tokenize your liquidity? It seems so simple now, but that's not something that existed previously. And all of a sudden, you're using your pool liquidity as liquidity and collateral on other platforms. And this is growing, right? Like, I think soon we're

going to see LP tokens use as like collateral on Maker and all kinds of stuff. But the fact that we can just build on top of, like, so you have your base liquidity. All of a sudden, you can use that as collateral and liquidity. You, you, like, build up, right? And there's efficiencies gained in all of this. So all of a sudden, I've provided it. I can now take that and use that somewhere else. That protocol could go take that and use somewhere out. That doesn't exist in traditional finance, right? Like, not that easily, at least. There's, like, contracts involved in it take, not smart contracts, dumb contracts, it takes multiple days to, like, sign this. So, the composability is just crazy. I mean, there's obviously negatives to it where like things become

too composable and they don't think about like Oracle attacks and all this stuff. So we've seen, you know, these flash loan attacks and whatnot. But I absolutely think, you know, we should start like meming this and this should be part of the narrative. But composability is the pitch of DFI. It truly is. Just what I was talking about a few minutes ago, how anybody can put a line of code out there and be a part of this ecosystem, that is composability, right? And like you were just saying, they can build a new money Lego or they can integrate one. This is the power of defy. And it's not necessary, there's two powers. There's A, anybody can come in and build composability money logos. There's B, everybody has a trustless, you know, censorship resistant financial economy. So I think that part is

kind of left out of our narrative. I think we should start doing a little bit better with that, because I think it attracts developers. It attracts, like, that really starts making people think. Because shit, it takes me $35 in two days just in a wire. You know, sending Eath is like the most simple thing you could possibly do on Ethereum. So, yeah, no, I think that's a very powerful aspect of D5. Yeah, I mean, I think, and I want to talk a little bit about interoperability and what that really means. And I think the way that it's manifested in Ethereum very often is,

and apps functionality is distilled into a token, a wrapped token of some type. And the fact that you can then take that somewhere else, wrap it. You could even imagine some of these assets being used, you know, taken off of chain in some respects. And you're introducing certain trust assumptions there. But when you think about what that universe could look like and how many of the important assets are already tokenizing on Ethereum, you really start to see this picture emerge of Ethereum potentially becoming this global settlement layer for all of this economic activity. And yes, they're going to be parts that happen in the periphery on other chains, on centralized

platforms and so on. But at the core, a lot of those apps are going to originate on Ethereum, and at the very core of a lot of them, I think, is going to be ether, because you want to have the most trustless, decentralized asset that you can possibly have at the heart of some of these things. And so I think that's the long-term vision. And I do want to riff off of what you guys were talking about earlier around technology and what's possible and where we are right now. So there's been a history in terms of technological revolutions. When new technology comes around, very often it's kind of emulating what the previous generations of technology could do. It's just making it slightly faster or cheaper or something like that. And I think we're seeing that with Defi right now.

that's how it started, I should say. It started mostly with services that people can like wrap their heads around. Okay, yeah, a lending app, that makes sense. Okay, an exchange app, I get that. But I think where we're headed, we're going to start seeing products that we're going to struggle to understand in some respects. And there are going to be things, they're going to be niche products that are designed for very specific types of use cases that we can't imagine.

And some of the biggest consumers of those are going to be robots and machines and not necessarily humans, you know, because they can have accounts too. They can't have bank accounts, you know. And so that's the cyber, that's the cyberpunk future that we're headed towards that Ethereum. Every robot gets a bank account. That's right. They can make one whether you want them to or not. That's a really important and good point, by the way, is one way this parallel defy universe wins is on efficiency and cost. There are so many humans involved in the traditional finance system that Ethereum can just, this sounds bad because it's replacing jobs, but it will replace. And like, that is one way that traditional finances realize the power of this is how

cost effective is. Like the Visa USDC news the other day, they were, they were citing how most customers it costs like up to $50 to do certain transactions. And they said on Ethereum, it costs like 50 cents. That's a good point. Like that is one way this, you know, this ecosystem I can take that over. Yeah, yeah. I mean, I totally agree. Composability is the thing. It is what made Defi grow so much.

If you just look at the data itself, right, and the growth of Defi during 2020, obviously a lot of it can be attributed to yield farming, but why did yield farming work? Well, because of composability. Without the composability, yield farming will not have been a thing ever. And that's for the same reasons that the other guy spoke about in that we can tokenize these positions, use them to, you know, you know, earn other tokens, for example.

It's like, you know, it's just crazy, right? tokenize your LP position, put it into a contract, earn tokens in another protocol, right? We saw crazy things like vampire attacks happening where sushi swap stole liquidity from uniswap and things like that. Like, these are not things you see in the traditional finance system and they don't play out this fast. Like if there is, it's normally called like a hostile takeover in the traditional system, right? Not a vampire attack, but that takes a long time to play out.

This played out in a week. Like, if people remember, the sushi swap cigar, like, the main part of it lasted one week, right? And it's because of that efficiency, as kind of Eric was speaking to, right? It's because of that composability, the incentives, the fact that you can move liquidity as quickly as you can move data, right, on the internet. It's just, it's insane. And I think, I mean, we are definitely undersell it because it's like second nature to us now. we understand it. But if we want to sell Ethereum to people, using those examples is the first place to go, I think. But at the same time, you know, maybe not a lot of people think about the

inefficiencies of the traditional system until they're exposed to Ethereum. I actually think that's another thing Ethereum does. It kind of exposes all the flaws in the old world to people. And they're like, okay, well, why am I doing it like this when I can do it like this? And it takes power away from the incumbents through that kind of mind virus of there is a better way. And I think that's what the internet did as well, right? To traditional media, it showed people, it's like, oh, I don't have to listen to like the traditional media. I could just go online and listen to whatever I want to listen to for better or worse, right? There are problems with that too. But so I think that's another thing that Ethereum unlocks with Defi specifically. But yeah,

composability is the thing. Without it, none of this would work. Moving value as fast as data. I think is a really awesome line that I think we've all heard before, but I think we forget how powerful that is. Hey guys, there's so much left in this interview. We're about to get into Ether being used as collateral in Defi. Is Ether actually a unique asset as collateral in Ethereum, or is it just one of the many different choices that Ethereum has to offer? We also talk about staking and whether or not staking has mass appeal. we turn to the conversation of EIP-1559 and burning fees with the interaction of increasing the scale of Ethereum. Does that overall burn more fees in the long term?

And lastly, we finish up with a conversation about NFTs and what that means for Ethereum to be able to provide economic activity to more and more types of assets. There's so much more left in this interview. Don't go anywhere. But first, we have to talk about some of these fantastic sponsors that make this show possible. Bankless Nation. Do you want to go fully bankless, but in the real world, Monolith is the Defy account that you need. It wraps your ETH address in a bankless visa card, and it does so much more. It closes the loop from Fiat to DeFi.

So you can onboard Fiat to die on Monolith with zero fees. Then you can convert that die to A-Di, which is an interest-bearing savings account. Again, zero fees. And then you can spend that interest in the real world on a visa card. so you can finally buy your cup of coffee with interest earned in Defi. Guys, this is magic. This is the closest thing to the Holy Grail crypto card, and Monolith gives you all of it. You need to download the app at monolith.

cometh. XYZ to get your bankless visa card. It's optimized for European listeners. They'll be coming to the U.S. soon. And when you get that visa card, the monolith card, tweet about it when you do. I love seeing people unpacking. They're beautiful bankless visa cards. It makes me realize that.

the revolution is here. Search monolith in the app store. WhyEarn is Defi's first self-building project on Ethereum, focused on producing products for those who are interested in earning yield in Defi. Wyern's various products are all built to suit each individual investor's preferred level of risk, from various vault strategies that leverage defy tokens to the safer earn system which relies on stable coins. Valtz are aggressive yield farming robots, each with a unique strategy that is designed to maximize the yield of the deposited asset. Y-Earn employs from the most informed developers in D-Fi to keep the vault strategies updated with the various yield-farming opportunities on Ethereum. For customers who are more risk-adverse, the Y-Earn's earned product may be for you.

Earn is a yield-aware dynamic money market that automatically seeks the best interest rates across the various D-Fi protocols and regularly migrates your deposited stable coins between the D-Fi protocols that are returning the best yield at the present moment. Y-Earn is a system that is just a little over four months old, so things are still very much an experiment. However, this hasn't stopped people from depositing over $700 million worth of assets into the Y-Earn system in order to find yield on Ethereum.

Perhaps the people that deposited all this money were tired of constantly making daily transactions to follow the best defy interest rates, and maybe the gas fees that they were paying ended up eating too much into their profits. With YERN, it doesn't remove the risk of these various protocols that it leverages, but it does remove the overhead

of constantly trying to make sure you're finding the best yield, and also so that you don't have to pay for gas to switch up your assets. Check out the products that Y-E-Earn has to offer at Y-E-E-E-R-N dot finance. That's Y-E-A-R-N dot finance, which I also have a nice statistics page

to see what other people are doing. But guys, there's a bunch of 20, there's like $30 billion worth of stable coins on Ethereum. Also, BTC on Ethereum is like, at all-time highs. Like, why do we need ether? Like, you know, we can just use the other monies. What about, what about ether?

DC, let's start with you. You know, I don't view stable coins or WVTC or any other assets as displacing Eith on Ethereum. I think if anything, and we'll start with stable coins, they're really taking on some of that medium of exchange role of money. And I think that's appropriate in the world that we live in today.

you denominate, most people denominate their salary in dollars or whatever fiat currency they use. They make purchases in that currency. So it makes sense for a medium of exchange for a lot of different assets to be done in stable coins. I also think, though, that you're still seeing ether used as a medium of exchange for a lot of those assets. And if you look like the NFT market, you know, the non-fungible tokens, which are like these artworks, these in-game items, so on there, tokenized on Ethereum, almost all of those are denominated in Ether, which I think is really interesting. It's kind of like a native economy to Ethereum. So I wouldn't be surprised to see more of that. But I think what that allows us to do is increasingly use Ether as this programmable store of value,

which I think is really Ether's kind of ultimate destiny. It's really going to become the store of value. and that value through the magic of smart contracts can be transmuted into so many different use cases. And I think the other thing is we need to remember that almost all of these stable coins, certainly the custodial stable coins, have real tradeoffs. And I think it's easy to forget that sometimes, right? It's easy to get lazy and just be like, oh, yeah, I'm just going to keep X amount of dollars in USDC. Well, don't ever forget that USDC, USDT, Tether, all of those are custodial. stable coins and they're backed by US dollars in a bank account, hopefully somewhere.

In USC, I'm pretty confident that they are. With Tether, you know, a little less confident. But remember that those platforms can be censored. And if you're dealing with really high value transactions and you want to minimize trust, they're not going to be suitable for you. And so that's where I think ether still has to play a role in this actual decentralized economy, which I do think credibly is going to take longer to emerge, right? And we've been developing pieces and parts of that, but it's natural that we go for the low-hanging fruit custodial stuff first.

But as we perfect those models, it gives us more insight into how to develop stronger decentralized models. So I think it really is a synergistic relationship. It's bringing more economic activity to Ethereum. And I think at the end of the day, you'll hear me harp on this. The two most important things to me

are bringing more economic activity to Ethereum and watching that result in more liquidity for ether. If we do those two things, I'm very confident that Ethereum is going to change the world. So, DC, I recently tweeted out the question, like, why aren't you an Heath Bull yet? So that was like last week. Of course, it's Twitter. So I got a whole bunch of shit posts, right? Like, ETH has no scarcity, all of these things, right?

But one of the replies, which actually is a relatively popular belief, is that Eith is, is maybe the internet of money, as you've been talking about, he's been saying. Defi is the apps built on top. So think of that as like the Apple or the Facebook or the Amazon or whatever. The wealth didn't go to the internet, to TCPIP. It went to those businesses on top. It went to the application layer.

So this one reply says, I'm a defy bull, but an eth bear. What's your response to that? To all the people who are like, yeah, permissionless open finance. B-Fi bull, I think YFI is great. But ETH the asset, nah, not so sure about. Yeah, I mean, and I understand the point of view of some of those folks. They're viewing everything from the orientation of like the legacy system. They're not thinking about the decentralized world that we are creating here. And I think, you know, I recently wrote some tweets on this, but the value of an asset is something that is emergent. It's not something that you can like dictate in

advance, right? And when the Ethereum devs first created Ethereum, all the public perception was that ETH was gas, right? And it's like, oh, yeah, we're using ETH as gas. And ETH is still gas. You know, it's still, but the gas fees, and I do think this is important for listeners to understand, the fee market floats independently of the ETH price. So, you know, just because ETH price goes up doesn't mean gas becomes more expensive in U.S. dollar terms or whatever Fiat currency you're using. But I think just being able to kind of think about, you know, ether is this unique asset in this ecosystem. There is no other asset on Ethereum that will ever have the properties of ether. And I think that when you really want to get at that decentralized, parallel decentralized economy that we're talking about,

ether is going to be at the center of that. Has that been fully developed right now? No, but is it developing? I think it's absolutely developing. I mean, and I think the biggest example is actually in these decentralized lending platforms where the most popular collateral by far is ether. And people are actually depositing and locking up their ether as a store of value literally, and they are borrowing stable coins against it. And I think that's, or they're creating stable coins through maker die. And I think that is fascinating because it completely changes the psychology around ether from something that you burn as gas to something that you're hoarding.

And so I go back to what I was said at the top. The value of an asset is emergent in how people use it in the market. And maybe the Ethereum developers who created Ethereum never thought that people would be using Ether in this way. But people realized the properties of Ether and are using it in this way. And I think that is fascinating. And I think we've, again, barely scratched the surface of that kind of use case. In an older article I wrote about how all roads on Ethereum lead to Ether. And Eric, I'm wondering if you want to vet that statement. Yeah, no, I totally agree. And I think it goes with what Ryan just asked, what DC was responding with. And I'll respond to that initial tweet comment that Ryan was saying. And I think it fits, David, what you just asked. But

you couldn't use the Internet. Okay, let me put it this way. You can't use Ethereum. without ETH. You can't. You have to have it for gas. If you want to go a little bit beyond that, you pretty much need it for collateral. That's arguable. But even if you just want to transact with stable coins, you need Eith. You don't need internet coin to use internet. And if you did, people imagine what the price of that would be at this point. I don't even know, right? Like if you had the smallest percent of that, you would live in a, you know, if connecting to your Wi-Fi, you had to pay internet coins. Exactly, right? So you do need ETHA transact, and that will never change. There's been attempts at economic abstraction. That's not going to happen, right? Especially with proof of steak. You are going to have to have ETH transact on Ethereum. That alone is strong enough. And David, where you're just saying, you know, with the relationship between Eith and Ethereum, they go hand in hand to me. I don't understand people that think of it any differently. If you are like using Ethereum, and let's say you come into Ethereum through USDC, right, what are you going to do? You're going to start exploring Defi.

Slowly, you're going to start to think about, okay, what are the benefits of ETH? Okay, you know, it's trustless that the monetary policy is eventually going down to deflationary, removing a proof of stake. You're going to start getting sucked into this, right? You might start thinking about, okay, there's inflation scares in the U.S. Or if I lived in a third world country, my currency, like, you're going to start falling into listening to these type of podcasts and people that are into Ethereum. You're not going to just like go on and be like, oh, yeah, USDC is cool. I'm going to start using defy and keep it. Like, I don't think that's going to happen. So I think anybody that's coming into defy through staple coins and thinking they're just

going to stay there is, you know, delusional to themselves. And I think, you know, the most important part of it is. is you're always going to need ETH to transact on Ethereum. If that is it, that's already a bull case for ETH, you know, people falling into the trap of real-y, the traps are probably, people falling into the defy like realization and, you know, how valuable ETH could be. And, oh, hey, I could have this asset that, you know, my government or someone doesn't tell me that I have to have, but I could have it.

And I could use this as collateral and take out a loan that, you know, people start to realize how powerful that is. You know what's funny to me, Eric, is there does seem to be like a double standard in crypto where no one would ever say that about Bitcoin. Oh, like Bitcoin the network, but not Bitcoin the asset. Bitcoin the network would be fine without Bitcoin, the asset. Yet the standard is applied to Ethereum and really Bitcoin as an asset on the Bitcoin network does the same thing. It pays for blocks. Why do you think this double standard exists? I'm scared Bitcoin maximalist. I mean, this is what, I mean, seriously, this is what, like, we've all been fighting.

Yeah, I mean, this is what Anthony and I have been fighting with Etha forever now at this point, basically. It's true, though, right? Like, the questions that we were just talking about, if you said that to someone into Bitcoin, they would just shrug you off, right? Like, oh, what if someone come up with USC? And, like, you know, it just doesn't make sense. So I, this is amazing to me that these are the narratives.

I think the Ethereum community, no, Anthony was talking about earlier since 2018, we've come a long way. And I think people are realizing that ETH is to Ethereum as BTC is to Bitcoin. It's the same thing. Bitcoin is gas money. It just is, right? And like, where we jump 10x over that is ETH is trustless collateral. ETH is the staking asset. ETH is going to be burned using 1559. So we're taking those leaps further. And you know what? These like fud narratives from Maximus, they're fine. They come and go.

Like we fight them, move on. I agree we're one cycle behind, but that just means we're going to go to freaking whatever 10K next cycle. And we're at 1K now. But that's fine. But they're the same thing at the end of the day. And Eath can be used for more than Bitcoin can right now. I had a lot of thoughts listening to the other guys.

but I'm just going to come right and say it. ETH is the most amazing asset in crypto. It will get more amazing as time goes on. There is a extremely strong plan to make it the best asset and to make Ethereum and ETH into and DFI on all the apps built on top into what I like to call a symbiotic relationship. So there are three value accrual pillars for ETH, right? There is uses trustless collateral within DFI or whatever else you want to use it with.

staking, right, that just went live. And we've already seen 1.1.1.5 million ETH kind of locked up there, which is a billion dollars worth of ETH. And finally, EIP 1-559 and paying gas fees. But I think the payment for gas fees is, you know, I mean, it's bullish because the more use, the more ETH needs to be bought to kind of pay gas fees. But I think it becomes like way more bullish once we have fee burning in place. So once we have proof of stake, a proof of stake, a proof of stake networks and no more proof of work with Ethereum 1.0. We just have Ethereum 2.0, proof of stake network with credibly low issuance, less than 1% in the worst case. Like if there's like 30 million each stake, it's still going to be 1% or less, right?

And I don't think we're ever going to get the 30 million east staked. If we did, the ETH price would probably be at 10K. But so we have that happening, right? Then take all the activity happening on Ethereum across absolutely everything. It doesn't matter what you're doing. If you are doing a transaction and you're paying ETH gas fees, a portion of that ETH is getting burnt, right? If we can increase the transactional activity to a point where more ETH is being burnt

that is being issued a year, ETH becomes deflationary. There is no other asset that can claim that within crypto. A lot of, I mean, assets that have viewed a store of values within kind of like the meat space, like gold cannot claim this.

It is not deflationary. ETH becomes the world's best store of value in my view out of absolutely anything, right? So once we have those pieces all in place and we are doing that, that is the ultimate bull case. And that's exactly why I keep buying EF even at these prices, right? I am not buying just for today. I am buying for the future because that is a future that I'm extremely confident in that's going to happen.

So to go back to the original question about things displacing Eith, that's not going to happen. Just because foreign assets come over, they fill other niches like, well, fill other use cases. Like stable coins obviously took the medium of exchange use case way from ETH, which is a good thing. We don't, like, you're not, like, ETH is money, but it is not like great money, right? It is not stable. So it's not, it's not like the best money that we can have on the network. So a USD stable coin kind of fits that, right? WBTC is collateral. I mean, that's centralized collateral and that's fine, right? That's just more liquidity, as D.C. was saying, to come into the Ethereum ecosystem. And as I said, once we have fee burning in place, all of these assets just

increase Ethereum's network effect and increase Eats value, because it's burning ETH. So yes, you're a foreign asset, but you've got to pay taxes to the network, right? If someone is using that asset, you're paying, you're essentially paying taxes to the Ethereum network, right, through burning these fees. And you're, and it's funny because if there's people on the network that don't even like ETH as an asset, well, too bad. If you want to use our network, you need to burn ETH and you need to accrue value to ETH. So that's like the whole bull case there. And to me, it's obvious. And as I said, like, still buying ETH based on that thesis. What you described sounds like an extremely, you know, disinflationary Austrian-style economy,

which always like blows my mind when Bitcoiners who would subscribe to like Austrian sort of scarce money principles completely reject ETH's role as a deflationary currency. I don't understand it. Bloss my mind, but we don't have to solve that today. This is the whole case. I mean, it's just like everyone has a bias, right? You know, and it's all human psychology. But I think the more middle of the road, Bitcoiners, from what I've seen, the more centrist, they see this vision and they kind of like understand it. And they think that fee burning for a network token, so like the protocol token of Ethereum,

makes a lot of sense and increase a lot of value. I am 100% sure that, you know, Bitcoiners would love to have fee burning. in Bitcoin for BTC, but they know that just bringing that up as an idea would be kind of like sacrilege. It would never happen because Bitcoin's too ossified, right? So they push back against it. They're like, oh, if we can't do it, then it's a bad idea. Well, looks like we're going to do it, guys, and you can keep dealing with that as you like. I'll say that what we're creating in Ethereum is not for Bitcoin Maximus. It's for everyone else in the world. And I think that's really important to remember because a lot of the narratives that have been pushed over the past couple of

years around Ethereum and Ether as an asset, they're not going to hold up for all of the new entrants that are coming into this market. And when they take the time to understand, even now with Ether's pretty modest issuance, which is fairly actually on par with Bitcoin, more or less, you know, it's already a lot better than fiat currency, first of all. But once they understand this concept that Anthony's described around fee burning, and as the network is used more, it's burned, and because of perpetual issuance, security will always be guaranteed. That's when the sophisticated investors, and you already see some of the sophisticated investors like Raul Powell and some of the people that he advises, they're paying attention to this stuff, right? The people who are bringing

millions and eventually billions of dollars in the space are paying attention to this stuff. they're not just going to be told the maximalist drivel that has been perpetrated for the past two, three years and take it as sacrosanx. So I think that that is a huge opportunity for Ether as it starts to really go mainstream. Yeah, I think that's an A plus point, to be honest. I don't think Ethereum should fall into trying to be Bitcoin. Like the narratives can be different. We can do things different.

There's no reason for ETH to try to fall on the footsteps. We'll be fine on our own. Speaking of not following in the footsteps of Bitcoin, and I do want to turn to what Anthony accidentally gave was the future roadmap for the rest of this podcast with his recently recited bulkcase. I want to turn to staking. And so here's the pessimistic take on staking,

and maybe you guys can answer this. No one wants yield on a volatile cryptocurrency. Staking doesn't have mass appeal. Like, who people that are interested in yield aren't interested in earning it denominated in this volatile crypto asset that they haven't heard of before. Why does staking have mass appeal? Let's start with you, Anthony. I mean, a billion dollars worth of aeth once yield on their eighth, so I think we can throw out that argument, especially, I mean, no, part of that argument, especially because that eth is also locked, right?

So you don't need, like, not all of it, but like a lot of it, right, is locked for one to two years. So you don't even have exit liquidity on that, right? unless you do some fancy things like with derivatives, but most people aren't going to do that, I assume. So like we've already seen such a strong outpouring of support for e-staking, right? People who want to stake for various reasons. Not everyone is like a profit maximalist who's going to min-max their profits and like try and optimize and squeeze out every last cent, right?

People are, humans are different. Humans have different ways of doing things. They're pragmatic creatures. They're going to do what makes sense in their position, right? So, you know, I have a few friends who would never touch defy yield farming, but they went straight into staking. They didn't even think about it. There's like, staking is what I'm going to do. I'm putting my eth in there.

That's it, right? And they have their own reasons for doing that. So I don't, I mean, and it's the same thing with like, I think with Bitcoin mining to or mining in general. Like, why mine a volatile asset, right? Well, because that, you know, you get to a point where it makes sense to do so because you're profiting from it outside of your expenses. too, right? So, I mean, I don't think that the volatility of the asset really matters too much. And it matters even less for proof of stake because you don't have those exorbitant ongoing

cost as well, right? You can weather the storm much better in a bear market for ETH, right? Even if ETH price drops a lot, your ongoing costs are a lot less. So you can weather the storm. It means you don't have to, like, dump lots and lots of ETH to cover your costs. You don't have to, like, do all these sorts of weird hedging and kind of like worrying about things. So, I mean, I don't think the volatility. matters too much and I think we've already seen evidence of that. And, you know, I believe if there was a two-way bridge between ETH1 and ETH2, we would be at a lot more than 1.5 million ETH staked, probably up at like 5 million or something, something crazy. So yeah, I mean, that's kind of like my view on it.

Eric, I know that you've gotten into the world of staking and tinkering with your validators. What gets you so excited about the concept of staking ether? Yeah, I mean, there's a lot of depth to this question and like what Anthony was saying too and I think you know we we need to realize we've been talking about very nascent technologies right like we're talking about investing in something that over the next i don't know 20 30 years like we're already what six seven years in this journey it's doing very well i think it can do much better over the next coming years um so why does staking matter right you can take an asset that you're taking a risk on you know volatility and all of this

is actually something that attracts people to crypto. You can take this and apply like a traditional finance thing of dividends to it. So not only are you kind of investing in this and you're probably okay at this point with it going up and down like 80% a year or whatever it might be. You can also earn yield on that. So that is something that attracts traditional finance people. You say to someone, hey, so let me just take an example. I've talked to a lot of family and friends about investing in crypto over the years.

I'm not someone that goes and reaches out to people and says, hey, you should invest in crypto. If someone comes to me, I'll respond to them. It's much easier for me to pitch, hey, you can invest and also earn a dividend or yield on your crypto than just saying, hey, you can invest and it might go up or down. It seems a little ridiculous to say that, given that it's only like 13% in crypto can go up and down so much. but I've realized how valuable that is to people. Just knowing that you're going to get some type of return on top of the crypto,

which they think is hard to value, has been a nice pitch for people to get in. So for me personally, I'll say one more thing. It's obvious. There's a lot of tax reasons for this. You go into crypto. It's going up and down. It might go up a lot in a year.

To cash that out, at least in the U.S., you're probably paying anywhere between 20, to 50% in taxes. You take that ETH and instead you just hold it, you stake it, you earn a yield on top of that. Yes, you're paying yield on that, but you're not paying on the sell amount. So I think there's multiple facets to this. I think it attracts people to say, hey, look, there's this dividend you can get. A lot of people like that.

And also, if you are a long-term investor, it helps you, like, avoid taxes and still get some profit out of Eath. there's something about that passive income element that you're talking about Eric, right? Like we did we did kind of a show and just with the ETH calculator to figure out how much it would actually take to retire on ETH, where you just have enough ETH in capital and you're producing enough ETH from a yield perspective to just cash it out and kind of ride each year in retirement. And I think people, I think you're absolutely right. that's probably an underrated aspect of staking. I mean, people buy rental properties.

They do all sorts of things that might make different levels of financial sense, but they do it for this passive income aspect. Putting on my Bitcoins or hat because I'm good at that. Dividends or yield from ether is actually dilution, right? We are diluting people that are not staking in favor of the people that are staking. And so the Bitcoiner criticism would be like, well, that you're just creating yield from seniorage. You're actually just diluting away the values of other people's ether for your value of staked ether, making ether not a very compelling asset to hold because if you aren't staking it, you're getting diluted.

How would you guys, let's start with you, D.C. How would you, how do you respond to a criticism like that? So I think the first point in a proof of stake system is that issuance is, is far lower than it would be in a proof of work system. And you do have, I mean, you do have a form of dilution, even in a proof of work system in the sense of if there's issuance of supply without a burning mechanism, that's introducing new supply.

And guess what? Most miners are just dumping it. So for all intents and purposes, that is creating that dynamic. But I think another important and the sister kind of proposal that's going to be baked into ETH too, is there's going to be fee burning in ETH 2. And that fee burning actually creates a mechanism by which it creates a benefit for all ETH holders. And I think that's critically important to understand. So yes, if you're staking your ETH, you're going to earn a reward. But remember that in this fee burning model, fees are going to be burned. And this is going to be 200 EIP 1559 as well. And as those fees are burned, the Ethereum supply will contract or it will stay relatively stable. You know, there'll be periods where we'll also wait a little bit, but the expectation is over time that the Ethereum supply stays stable or declines. And as that supply declines, all holders of ETH benefit from the

economic hardening of the asset. So it actually creates, the fee burning is actually a very democratic proposal in that respect because it distributes a benefit to all ETH holders. I'm not going to claim to be a master of like economics or anything like that or like totally understand the intricacies of how a Fiat system works. But I think to DC's point, I mean, I described before, right, how ETH can potentially become net deflationary due to fee burning and all that good stuff. And, you know, DC mentioned that under proof of stake, the issuance is much lower than an proof of work system. But the thing is, is that we expect ETH to go up in price, right? Maybe not to go up 100% a year into perpetuity or whatever, you know, but we do expect it to keep going up, right, as the network becomes more valuable. And it obviously won't go up. forever, but if the overall issuance is 0.5%, right, for the whole network, but the ETH price goes up much more than that, then do people really care that they're being diluted, right? I mean, I wouldn't. Like, why would I care that I'm being quote-unquote diluted?

People care about it with Fiat because Fiat is pegged and stable, right? And you are getting kind of like inflated away and your dollar is worth less, it has less purchasing power. But if ETH's going up, right, and it's going up more than the new issuance in terms of like percentage-wise, then your purchasing power goes up. And that's what really matters. It doesn't really matter about there's more tokens in circulation or anything like that. So yeah, that would be my main pushback. As I said, I'm not an expert on all the intricacies here, but that's how I understand it. And that's how I think a lot of people will view it as well. I also, I want to add a thought, and this has been really, I've noticed this in the market really in the past few weeks, is we're seeing

a lot more stakes to ether tokens as well that are going to be hit. the market. And the demand for that is frankly a lot higher than I thought it would be. And the space has emerged way faster than I thought it would. And I'm definitely not going to make any recommendations to use any of those because I think there's a lot of risks with that and your basic. Most of them follow some kind of custodial model. Some of them are decentralized pools. But you could actually imagine that a lot, there's a whole bunch of ETH that gets staked. And even if you're not running a validator, you might be holding staked either. And I, and I think it's I think it's actually going to get easier and easier to run validators over time and to do more of

these decentralized pools where even if you don't have 32 ETH, you can still stake. So we've been dancing around the subject of EIP-1559. So let's just go ahead and dive right into it. And one of the thing that fascinates me about EIP-1559 is not just the fee burning, but the combination of EIP-1559 and sharding. Like what happens when we both get scale and all. fee burning and this is something I don't know the answer to and I want to pose to the group. If we increase the amount of block space, we'll increase the amount of block supply, which means

we'll probably burn less fees at the start. But does that scale that we have from shards, from having 64 shards, does that increase the potential of total fee burn over time? So this is one of my favorite questions in the space right now. And I'll say I don't know the answer. this is going to play out. But traditionally, it's been the bullish case that there's demand for block space. If your block space is filled up, that's bullish. The reason for that is no one has actually scaled. No, no blockchain in demand has scaled. Ethereum and Bitcoin are in demand. They haven't scaled yet. We don't really know how this is going to react when we scale. So let's say we increase Ethereum's capacity 64 times, right?

we're not really sure are we going to get like two times the current demand or 64 times the current demand. And neither of those cases is bearish in the old worldview of block space needs to be in 100% demand, right? Because in each of those cases, Ethereum is more in demand. So now let's put this in the 1559 use case where 1559 is burning fees. If block space is pretty full, we're burning more. yes we would want a more in-demand blockchain but just being two times more in demand is not the worst thing right you're still burning a little bit more i truly don't know how this is going to play out um we saw like today uh average gas price was like 330 gway which is insane most people using

defy i think we're paying 20 to 30 dollars for a transaction so the demand is there in high demand times, you know, maybe tomorrow, the next day it calms back down to 20 or something like that. I don't know what it is right now. Let's see. 74, so it's still super high. But I think this old narrative of, you know, and I've pushed this narrative on a theorem, so I'm not going to lie. I'm part of this, but this current narrative of block space needs to be in demand for the asset to be bullish is going to get thrown out the window when sharding comes along and when layer two comes along. because what actually matters is how many people are using your blockchain. And we just like kind of package that in this weird narrative of, oh, we're limited.

So, you know, people, we're at X amount of users. That's our cap. That's bullish. It's actually more bullish if you're under your cap, but you're doing five times as many users, 10 times, 25, 50. We've just never seen a blockchain actually do that yet because the ones that I promised it don't have users and the ones that have users haven't scaled. So this is going to be one of the more fascinating things to watch for me in this space. The interesting thing about all the scaling too is like more transactions, probably more users, more users exposed to Ethereum, what asset are they

going to want to buy Eith? Right. So that also has a like some sort of like byproduct effect. But I want to ask you this, Eric, because probably the biggest criticism I've seen about EIP 1559 is that it's not here yet. You know, like there's some doubt that it will ever come to Ethereum. And I want to ask that question. So if we define Ethereum as both like we probably all do, both ETH1 and ETH2, that is Ethereum, it's the Ethereum network, what is the probability that we don't get EIP 1559? Because it's not here yet.

I would, if you asked me this question six months ago, I would say, 25% today I'm going to answer 95%. So I think Tim Biko has should be championed among the entire Ethereum space for taking the lead on 1559. You know, all the client teams and everything, the EF, everyone's helped here. And I think finally the community has realized we're all on the same page. Tim Rough Gardens report came out and I think that flips some of the naysayers. I think this is going to happen. I actually will go on record and say I think it's going to happen in 2021 as well. So there's been a lot of bullish momentum around 1559 in the last few weeks. And I think it's like a lot of things coming together so that it's

not just one happening. But I just want to throw a shout out to Tim because I think, you know, Anthony and I talked about this last week on the podcast, but it's not that we have a lack of like genius people in the Ethereum space to make this stuff happen. We actually have a lack of people that are capable of coordinating people to come together and build these things. And I feel like Tim has done that with 1559. And I'm very bullish on it getting in at this point. Anthony, I want to ask the next question to you. How does EIP 1559 change the characterization of ether the asset?

Like what is ether the asset before fee burning? And what does the addition of fee burning? How does that change ether the asset? What does that change it into? Yeah. So I think I described this. it before how it kind of may, you know, potentially, I'm not, I'm not going to say

that it's 100% going to be net deflationary at all times, but it potentially turns, you know, EF into this net deflationary kind of asset. And, you know, fee burning isn't anything new. There are apps that use this, you know, Make Dow being the famous example. And they're actually

criticized for this, right? Where that people believe that the fee burning mechanism of MakerDA doesn't actually make sense, but it make, but people, the same people praise a thing. Ethereum and 1-559 and say that it makes sense for that. And David, you put out a tweet the other day and you were kind of having trouble,

you know, squaring this in your head. But I think it, I mean, I don't think that if ETH was just a token that was burnt and that was all, it would work, right? The thing is, is that ETH is a lot more than that. You know, whereas the MKR token really isn't, right? MKR is not a store of value, right? It's none of that stuff. Whereas ETH is, right?

ETH is used to stake, MKR isn't. So if you do those kind of comparisons there, then you can kind of find the difference and why fee burning makes a lot more sense, right? But on top of that, Ethereum as a network, right, is a lot bigger than Maker as a protocol. So if we're looking at the fee burning. So, you know, there's not going to just be those

who use the maker system paying MKR fees and getting those burnt. It's going to be absolutely everyone on Ethereum doing anything that's going to be paying those that fee burning. So yeah, it has to be taken as a holistic thing. It can't just be looked at as, you know, 1-559 comes in, we burn ETH, ETH number go up.

No, because, I mean, ETH number went up before we had even staking, right? We only had ETH as, I guess you could call it like gas or ETH as, you know, emergent store of value, all that sort of stuff. And then all those use cases come together and then fee burning just reinforces that and adds another value of cruel pillar for ETH. DC, if somebody wants exposure to Ethereum the economy, does fee burning allow for that to happen in ether the asset? Or is ether the asset already tracking the Ethereum, the economy? Or how do you think about whether or not fee burning enables ether the asset to be more reflective of Ethereum the economy or not?

I think it does to an extent because I think certainly the more economic activity there is on Ethereum, the more ETH is going to get burned under a fee burning mechanism. And I was thinking about Eric's response to your question on how sharding will affect things. And I agree it's hard to predict, but my general hypothesis is there will never be enough Ethereum block space on L1. No matter how much you have, it will get used up. And if you're talking an increase of even 64X, which, and I think most of the current proposals aren't saying we're going to make it 64X overnight. it would be like a rollout process where you're adding shards as capacity as demand comes online.

But basically, I think a lot of activity realistically is it going to eventually shift to L2 anyway. And when you think about that, that enables even more transactions. And so, I mean, the goal eventually is millions of transactions on these additional layers. And what does that make? That makes those layer one commits by those layer twos even more valuable in terms of the block space that they're willing to pay for and how much they're willing to pay. So I think that if you're interested in Ethereum as an economy, as a platform, ether is still the best way to gain access to that investment upside.

And it's the most diversified way. Because, I mean, while I think DFI will continue to be a big driver, and I do think there's some great DFI projects, which I'm invested in, there's going to be other things that come up, like the NFT economy, which is actually denominated primarily in Ether, as I mentioned earlier. There's going to be all kinds of other use cases. We don't know which project token is going to necessarily do best over five years or 10 years. I don't even know if any of these projects will necessarily be the ones that are dominant then.

I do know that the network will still use ether. And I do know that ether will still be the hardest, you know, with EIP 1559 and the most ubiquitous and the most used and useful asset on the platform. There's a bunch of debate as to how do we get access to exposure to Ethereum, right? And we have the DPI token, which is the tracker of DFI. It's like a DFI index. And then there's been debate as to like, does Ether get you a share of the Ethereum economy? Does it give you upside exposure to the growth of Ethereum? Eric, how do you see the relationship between Ether, the asset, and Ethereum, the economy?

Yeah. I mean, as far as like getting exposure to Ethan DFI, I would still pick ETH first. I think, you know, earlier we talked about cycles. right so it starts with bitcoin is in a mature cycle eith to me is in a mid to mature cycle defy is in a young to mid maturity cycle so if you it all depends on like your risk tolerance how old you are how much you have to invest how much you have to lose like all these things right so if you want exposure to eth and defy it's eth in like dpi right um but as far as like I totally agree with what DC just said.

If you want just true exposure to Ethereum, it's ETH, right? It is always going to be used for yes. It's always going to be the base collateral. It's going to be what you use to stake. So if you're looking for just a safe, let's put these in huge quotes, safe versus like, you know, traditional investments, right? It's Eith. If you want to add a little riskier portfolio, something that, sure, maybe you could go

to zero, maybe we're all crazy. There is the 1% scenario where that exists, right? You hop into defy pulls index. You hop into, you know, Wi-Fi or whatever your favorite defy coin is these days. Put that as a part of your portfolio. But if you want exposure to a new financial economy to defy to a trustless financial internet, just hold Eath. You're not going to be disappointed. Maybe you're chasing some things one day or the other, but trust me, you're not going to be disappointed in that. Eric, I think you made someone's head explode when we just called Ether and Bitcoin the conservative less risky assets. But it's all relative. It's relative to the rest of the crypto economy. I think, yeah, I mean, I think on the risk thing, I think that's a really good point.

But, you know, I think the reason why it takes big money so long to come into things is because they don't like risk, right? They want things to be, quote unquote, de-risk. And I guess BTC is at that point now for a lot of people, right? Where it's like, you know, it's, it's not going to zero. We're confident in that. We're confident that the narratives make sense and that, you know, everything around it makes sense. We're going to buy it because we feel like it's derrised. Ethel, as Eric said, ethel move into that on the maturity scale over time and then defy will as well. But it's, it's not like rocket science. Like if you're investing in an early stage company, no matter if it's like a defy kind of company or a traditional company or whatever, it's still risky,

right it's a risky venture there's there's the same set of risks uh so you're you're you're basically taking on that risk for a higher potential upside uh and you know it's it's very hard to outperform the the indexes in the traditional finance system just like it's very hard to outperform the kind of i guess whatever on indexes to in crypto btcc eith uh and maybe potentially the defy pulse index as well so it's just it's it's literally always all about risk and that's how you should manage you know yourself and your investments and that's not investment advised but i think that's just common sense this has been a really awesome conversation about ethereum the economy and ether the asset and i think we would be remissed if we didn't talk about nfts because that is a whole its own conversation in of itself

we've dedicated entire podcast to this we'll probably dedicate more entire podcast to this but it definitely belongs in the conversation of what ethereum is as an economy what are nfts and as a tool for Ethereum, what do they allow Ethereum as an economy to do? Yeah, so, you know, NFT stands for non-fundable tokens, and that's in contrast to this concept of fungible tokens. So I think it's helpful to define by exclusion a little bit. So fungible tokens are like ether or like die or even like USDC and other tokens where it doesn't matter if you get one or the other. They're all basically equivalent and can be used for the same purposes. NFTs are different in the sense of each one that is tokenized is unique in some way or it has or has the ability to be unique. And I think we've

seen NFTs emerge in a few different areas that are interesting. And fundamentally, I think there's three areas that people should be keeping an eye out for. So first is like artwork and gaming. And I think that's the easiest to kind of understand. At this point, everyone's seen these NFTs on Rarable and other marketplaces like OpenC where you can go on and you can buy ownership rights to a digital artwork. Now, of course, anyone can view the GIF or whatever file format backs that, but you're the one that owns it, and you're the one that has the right to kind of sell that token to someone else. And there's some exclusivity within that, and I think that's why these things have value, which is also why I think the traditional art market has value.

And I think the other side of that are these gaming NFTs, which are also super exciting. And we see that in games like Axie Infinity and Gods Unchained, where these are in-game items that you can basically use as part of the game. In some cases, you can level them up. You can mate them with each other and create new NFTs, you know, CryptoKitty style, the first NFT game. But there's a ton of potential there. And some of those axes are going for huge amounts of dollars. I mean, I think there was one that sold for like $100,000. And we've seen CryptoKitties go for huge amounts too.

So they border this line, they bridge this gap between like a piece of artwork slash status symbol and an in-game item. And I think we've barely scratched the surface there. A second category, I think, is going to be around like access rights. And having an NFT in your wallet allows you to do certain things. It's like a membership token, right? And I think there's a lot of value to that too, because you could imagine someone in issuing a membership token limiting the amount and saying, we're only going to have a thousand members, but you can sell your token to whomever you want. And you got to sell the whole thing.

You can't sell like a part of it. And I think that is, that's a very interesting set of use cases that I think will also see a lot of activity on. And then the third is really around kind of financial products. And some people don't think of NFTs within that context, but we've seen in the Eurone ecosystem, they put a lot of effort into kind of thinking about how to create these unique financial contracts, which are insured and are tradable, and their NFTs in the sense of they have to be unique

because each contract has unique properties. But that's another fundamental use of NFTs. And I think when a lot of people talk about NFTs, they're just talking about gaming, but you really need to think about all those use cases. And I think in order for NFTs to really take off on Ethereum, that is where we need some ability to scale. And I think we are seeing some roll-up-centric solutions,

like Gods and Change is rolling out, immutable X, which is going to be an NFT-focused L2, and that's going to be available for others to use. So I'm really excited to see what happens in this space. Yeah, to me, the way I see NFTs is exactly how you described at the start, where, like, first there's cash and monies. And we call Ethereum the Internet of Money. But I also, I rather prefer the term Internet of value, because if you have just money, like you're not, then we're not talking about specific assets, right? Your house, the deed to your house, house is a real world NFT, right? It's very unique. It is registered to one specific thing and it's

not cash. And so as Ethereum has an internet of value, especially when we start to integrate the conversation of like more economic activity plus EIP 1559, having like this surface area of NFTs where any type of asset can be represented, any unique asset can be represented, could add just more overall transactional volume on to the Ethereum economy. So, yeah, it's the financial internet, David. Get with the new means. Oh, I have not. That has not heard that one.

No, no. I totally agree with you. And like, I'll just say quickly. I think where we were talking earlier, where we're burning transaction fees and why do you need ETH? It's these use cases that are going to branch out from Ethereum. NFTs. We're going to branch out. And all of a sudden, you're like, wait, people need ETH to transact to get NFTs.

Wait, we're burning ETH to. Like all. a sudden these use cases count up and the amount of burnt eth the amount of eath people need to accumulate to use ethereum starts going up so i i totally agree it's not just it goes beyond and we're talking about now the financial internet and probably even going beyond that once you know i i i shit on the world computer but we could bring that back someday when we're ready um so i think we'll get there but these use cases just start blossoming and you start realizing how important neat actually is. Yeah, I'd basically mirror exactly what, what Eric and DC have said there.

I think, I mean, it's going to bring in a new cohort of people, NFTs, for sure. We're already seeing that right, with people doing collaborations with Nifty Gateway. I'm sure many of the people that came in and saw what he was doing did not know what crypto was beforehand, did not know what Ethereum was and any of that sort of stuff. So I'm bullish on that, you know, on that bringing a whole cohort of new people because, I mean, you know, DeFi is fun. and everything, but it only, I mean, the deep in the weeds, Defy stuff only attracts a certain kind of person, one that is happy to take on a lot of risk, right, do a lot of speculation, and everything like that, at least Defi as it exists today. Obviously, we want to get Defi

to a point where it's like, you know, has all kind of the economy running through it and it appeals to everyone, but it's not what it is today. Whereas, you know, NFTs appeal to a whole entire subset of people that are in the art ecosystem, the gaming ecosystem, right? interested in like insurance products to i mean you know nfts we we saw you could tokenize insurance positions right and things like that so um i'm just really bullish on that how about interested in collecting uh figurines anthony is that i mean you could tokenize the i guess like the ownership of them uh that would that would work uh to to represent i'm just looking at anthony shelves of figurines behind

on a zoo background here um guys this this has been fantastic And I think we kind of want to end with this because I think we're all like Bitcoin hit all-time highs. Ethereum, ether is back over 600 in price. Like the highest price has been two years, two and a half years, something like that. I feel like we all realized that we have come out of the bear market, right? We're kind of on the other side, right? Now we're on the ascent. last time we had an ascent like this was Ethereum of 2017.

And now we're Ethereum 2020. I guess my question is, what's different? 2017 versus 2020. What are some of the new strengths we have, the new weaknesses? What's kind of different about this bull run and the Ethereum of 2020? Maybe we'll start with you, Anthony. I think everything is different. I think, like, I can't really, like, I was in Ethereum in 2017 throughout the whole bull market then.

I can't really find too many similarities. I think maybe the community is quite similar in terms of like the core community in terms of their values, what they want to see happen and everything like that. But the network has evolved to kind of like be a home for so many new use cases. I mean, MakerDAO didn't launch until December 2017. So essentially, we didn't really have anything really deep. defy within 2017, right, that we know as defy today. The main use case was ICOs, right? Um, which obviously ended very badly for a lot of people, uh, and ended very badly for the ETHs price after ETH went up, uh, because of that. So I mean, yeah, without going into like everything

that, that, that, that is changed, I, I do really think that that it's a totally different game now. Uh, everyone that was in Ethereum in 2017 that can, that may have left and comes back now, we'll see that and be like, wow, this is like nothing like I remember for good reasons. It's not like we got worse. We got like so much better, right? And we became a serious kind of financial network rather than a play thing or a casino. Because really, I believe that 2017 Ethereum was a casino, even though people like to call defy a casino, no, that's nothing compared to what happened in 2017, right? And all the speculation that went on then.

I think back then the price got way ahead of where the technology was. You know, people legitimately thought ETH II was launching in 2017, right? And bought ETH because of that. And that was another hype narrative at the time. So this time, we're delivering all the things that were promised back then, right, and more. So, yeah, just totally different ecosystems. You can compare absolutely everything that happened and find a difference there. I would say, I think we earned this.

So the famous Vettelic tweet is, did we earn this when the Ethereum went above or around a thousand last time? I think we earned it this time. I truly do believe that. Like, I think we've built very cool products, products that can be used by people across the world, you know, innovative products, interesting products. I think we have years to go still. But I think we can say at this point we've earned it.

And I think, you know, looking at ETH price, 652 right now, who knows what it is when this podcast goes out, probably anywhere between 400 and 1,000. but I do, I feel good about looking at it now. Truly, when it first went up to that 1400, you know, it felt like just pure speculation and all that. And I think this feels good. And I think I don't know, I'm not going to, I'm not a price predictor. I don't know where it's going.

But I think we're building something great here. Well, Eric, we're definitely getting to price predictions. So maybe you should start chewing on your answer to that question soon. But while you chew on that answer, I want to turn to it. and get his take on that same question. Yeah, you know, back at the height of the 2017 bull market, the most exciting thing was like CryptoKitties, and that was all the rage.

And just think how far we've come since then in terms of impactful apps. And by the way, I think Cryptokities was actually really cool for its time and very innovative and chartered a lot of really interesting things in the NFT space. But Defi in general did not really exist in the way that it does today. And I think Anthony touched on this too. During the last cycle, ETH was really being used primarily as that medium of exchange to buy tokens. And being stuffed into project treasuries just waiting to be sold, basically, in a lot of cases. And I don't think that was really the most compelling or most valuable use of ether as a financial asset.

I think what's really different to me this time is how ETH is being used as a financial asset now, which is increasingly as the store of value. You know, two years ago or three years ago, ether to most people was still gas and that sometimes MLE money, now Ether is on the verge of becoming a macro asset that's being sought after by very wealthy investors to diversify their portfolios into alternative assets. And soon they're going to realize

it's something that's becoming more scarce and can generate income. So, you know, to me, it's really the emergence of Ether as a financial asset that I think is going to be. be the defining feature of this bull run. You know, DC, before we get to price predictions for everyone, because those are fun, for a lot of people listening, especially because I think this bull market will play out over months and people might refer back to this episode, they weren't around in 2017. This will be their first crypto bull market, right?

You guys have been through bold markets. What advice do you have for someone who's going to their first bull market? What would you say to them? What would you say to a younger you? I'll start us off. And I think that it's important to keep your head on straight. And it's important to not take on risk that you can't afford to take on. And I think that's really important because it can be very easy to get caught up in the hype as things are going up in value. And honestly, no one knows really where the top is or how far it will fall and when it will fall. People don't know exactly when those things will occur.

But at some point, if this builds up like other crypto cycles, it will have a huge blow off top. and you need to keep a level ahead. And certainly, you know, for me, Ether is a long-term investment. I want to stake as much of it as I can. I want to keep it because I know it's going to be over multiple cycles that we really establish the value of Ether. But you need to be careful, especially if you're getting in now, I think this is a great time to be paying attention, first of all.

I think if you're coming in a year from now, it's probably going to be a lot more frenzied. And there's going to be a lot of people making promises on projects. You know, and Ethereum is a permissionless platform too. just because something is created on Ethereum or any other chain doesn't necessarily make it good. Anyone can build anything on Ethereum. So I think be careful for people who are trying to part you from your money. Yeah, I would say this is a game of survival.

Survive in advance. Survive the years. You know, take some profits every once in a while. There's nothing wrong with taking some VHap profits and, you know, making your life a little bit better. But hold on to your ETH. Don't lose it. Don't leverage. Totally agree with D.C.

Don't overextend yourself. survive in advance. Practice good risk management. I think, you know, I actually in 2017, I didn't actually get too ahead of myself. I held most of my EF and I didn't speculate with most of it. I maybe use 10% of my stack or something to speculate on ICOs and things like that. But in general, yeah, practice, practice proper risk management. Don't feel kind of regret when you see, you know, you put money into something and then it goes

like 10 times, for example, right? and then you say to yourself, oh, I should have put more money in, right? Don't let that take hold because then you'll do it on the next investment and you'll get wrecked, right? So be sure to always be comfortable with the decision you're making at the time and understand that, yes, you know, you're investing in something and you're investing in it because you believe it can go up, but you also realize that there's downside involved too and it can go down, right? So you don't want to over-invest and over-expose yourself to any one investment, you know, depending. as Eric said before in massive quotes, the safer investments within crypto, obviously, BTC and Eath compared to the rest of crypto, right?

But the safest investment, it's not even an investment. The safest place to be is cash, but there's hardly any risk there, right? Unless you talk to Bitcoin, as I'll say cash is going to collapse. But, yeah, just in general, manage your risk and don't get too ahead of yourself and don't let FOMO take hold,

because FOMO means wrecked, really, in my eyes, because you don't think straight. You know, we've all been there. You know, I'm not going to say that I'm like the perfect risk manager or anything like that. But, you know, prepare yourself for what's coming because the frenzies, I think, is going to get quite crazy as we move into this new bull market. Turning into the last question I want to ask before we get into price predictions, it's often said that Ethereum and Ether is just one cycle behind Bitcoin. And I think that's a pretty easy thing for people to get their heads wrapped around. But also, if you peel back the layers, there seems to be some.

the incongruencies with that. Because in this current cycle for Bitcoin is the cycle where a lot of big institutions are putting their balance sheets into Bitcoin. And now we are also seeing that with ether at the same moment of time. And that's ether ahead, one cycle ahead of Bitcoin. And then at the same time, you know, Ethereum has development. Like we have this whole ETH2 thing. There's just at some point in time, like this whole like one cycle behind Bitcoin, I think is going to run out. So like when, when Ethereum, when you guys see Ethereum in this trajectory as an ecosystem, how do you guys see, like, are we able to actually, like, quote unquote, skip ahead a cycle? Or what does, like, the future adoption of Ethereum look like, especially in a world where, you know, 2020 just shook

up everyone's mind about how the world works. Like, how quickly could we actually see some of these things adopted? Eric, I think you've been through the most cycles out of all of us. So let's start with you. Yeah, I would say it could happen faster than we think. And I do think, what happened in 2020 with COVID and all this stuff, like remote life, remote banking, this plays into the Ethereum narrative, right? There's no doubt about that.

And yeah, just because you're one cycle behind doesn't mean you can't hop five cycles ahead, right? That just means like your narrative so far hasn't been adopted. It hasn't been understood. That's fine. Like we're on this podcast helping the narrative, right?

Let's not kid ourselves. We're trying to like push this along and, you know, make people understand it. But I think we could accept accelerate way past. And I think, you know, I said earlier, Bitcoin has done a good job at capturing the digital gold narrative. To me, that's boring. I think we can blow 10, 100 times past that. And that could happen all at once. But, you know, you never, markets are never about fundamentals

in the present. Markets are about fundamentals of their current cycle. So markets go through cycles, right? Multiple year bear cycles, multiple year bear cycles. And bear cycles, you build your narrative and bold cycles, you talk about them, you build on them, and then it happens again, right? Like, this is every market, not just crypto. So we'll see where the Ethereum narrative gets us at the end of this cycle. We're very, very, very early, in my opinion, still in this cycle. Maybe not price, but narrative-wise, we are. So I think we could hop ahead. Do I think we're, you know, I'm not going to make like flipping price predictions. I'm more going to talk about, does mainstream understand the narrative of Ethereum versus the narrative of Bitcoin Digital.

Do I think we're going to get there at this bull cycle? No. That's not a prediction of where price is going to be. I think next cycle is where Ethereum takes over. And I think that's because Bitcoin's kind of the gateway drug that brings people in and, oh, this crypto thing and they start to learn. But I think each time to shine is next ball. Anthony, I was waiting for Eric to drop the F word and he said flippinging.

Is it possible this cycle, Anthony? Oh, man. I'm going to, I mean, I've always believed in it. But I mean, it is something that I'd love to see happen, but I wouldn't put a high kind of probability anytime soon. Just, I mean, simply because of the amount of money pouring into like Bitcoin as opposed to Ethereum, right? you know, I mean, maybe it could briefly happen during some really crazy mania, but in terms of like a sustainable flippinging, right, where ETH is literally number one and it shows no signs of being, you know, reflipped by Bitcoin, for example.

I don't see that happening for quite a while. Bitcoin has a lot more momentum behind it, a lot more years under its belt, as Eric was saying, with kind of cycles and things like that. I think, you know, I actually think Ethereum, like to what I was saying earlier, it's going to play that its cycle is going to play out a lot faster than than than than than bitcoin has just because it's later on within the kind of overall crypto cycle for example right like bitcoin is the gateway drug and then you know once you have one drug you you know you're more prone to trying the other ones right um so it's it's the same thing here and that's what i was saying at the start

where i was like you know once you're outside of crypto bitcoin's what you hear about you know it's what you come into it with but then once you're in crypto you discover ethereum defy defy tokens all this sort of stuff and you're a lot more comfortable getting involved with that once you have entered through through bitcoin so yeah bitcoin took what 11 12 years to get to this point where it is today ethereum's going to do it in one to two i reckon in terms of like getting that mainstream consciousness in terms of those big fund managers right they're already allocating to eith um and i believe that uh they're not going to any other assets that they consider i mean i i can't see any other asset that even comes close to BTC and Eath in terms of like appealing to those people.

So yeah, it's going to happen a lot faster. Even though I still think, you know, ETH is one cycle behind Bitcoin, it's just, it's not going to take like many years as it has for Bitcoin. Yeah, you know, I would echo what the guys have said here. And I would also kind of, you know, I'll play him it this way. I really think Bitcoin has helped prime the environment for the crypto revolution. And in a lot of ways, it's proved the value proposition of the entire asset class, which is really all about digital scarcity. And I think it took several cycles for people to understand that because it's completely counter to everything they've ever grown up with in this digital revolution, which really started in the 90s.

Everything's copy-paste. Most people grew up. Most nerds like you guys grew up downloading illegal software, you know, because you couldn't afford to buy it or whatever. you know, I mean, that's the whole mindset of how a lot of people viewed digital assets, was they're all copy-pasteable. So the idea of digital scarcity took some time for people to understand, but now that they understand it, I think that sophisticated investors, especially at first, are going to very quickly grasp the value proposition of Ethereum,

and they're very quickly going to see the value proposition of defy. And I think even in defy, you're going to see legacy institutions enter into it, Not because they're just trying to draft off a hot crypto narrative. You'll see that too, but because it's cheaper and because they can offer services they couldn't offer before. So I think there's a real value proposition here. And the understanding will come as people start to see the value in these products. So I think we could definitely move a lot faster than Bitcoin did over, say, 10 years. Gentlemen, this has been great.

I think Eric is still preparing his answer. So we'll start with DC. Price prediction for Eath at the top of the side. I don't typically give price predictions. I want to start with a 30-second anecdote. So I was at a blockchain. I was at a blockchain conference in D.C. in April 2017. And Bitcoin had just retaken its previous like all-time high fairly durability.

It broke through like a thousand. You know, the previous high back in 2013, 14 was about 1,000. And so they asked the audience, what are your price predictions? And one guy at the end of the year, and one guy was like 2,000. Someone else was like 5,000. So one person said 10,000, and everybody looked at him and gasped. And so I think my broader point is, bull markets can get a lot crazier than you think they can. And they also might not fulfill all of your hopes and dreams.

But I'm going to put out a range of somewhere between 4,000 and 20,000. Wow, Eath price, 4,000, 20,000. Anthony. I'm happy with that in most of those numbers. Can you top that, Anthony? Can you meet that? Can you be more bullish, Anthony? I have not been shy about my price prediction for ETH,

for anyone that follows me on Twitter, especially, of $10,000. And I have on-chain proof of my bullishness because I created a set on token sets called the ETH Maximilus set on in January of this year, when ETH was basically, so creating that at January of this year, I don't think people understand how hard that was to do

because Heath was in the low hundreds and 2019 was a terrible year for Eth. It basically returned like 2% on the year or something. So I created that in January saying this set will basically sell all of its ETH only when ETH gets to $10,000. And obviously I was called crazy back then.

I'm still called crazy now. We're up at the 650s, right? And I mean, I'm going to be called crazy and then one day, you know, I believe we're going to get to 10,000 and the people are going to be like, wow, wow, you were right. And I'm no longer crazy. So I can agree with DC that we could see a 20K as well because of the craziness of bull markets.

But in terms of like, I guess maybe a conservative estimate, $10,000 is what I've stuck to and what I've tried to like, I guess, kind of meme about. And I actually believe in it, right? I don't say it just to kind of like, you know, get engagement or whatever. I say it because I believe it. And as I said, I have on-chain proof that I've believed it for quite a while. Anthony has been the person beating the ETH to 10K Trump when it wasn't a popular thing to. I remember talking to Anthony way back when saying like, you know,

eth is never going to go to 10K. That's way too high. And then all of a sudden when DeFi summer came around, I saw my like mental modeling around the price of ether shift. I was like, 10K is way too low. That's how it happens. Hashtag road to 10K. Is that the right hashtag, I think? Yeah, let's see.

I got to start using it more. I'm actually curious to hear Eric now because Eric actually not as I don't know if he's getting ready to sober us up or like give us more juice I'm looking at him right now I mean I guess on the bear I guess on the bear in the room here so I'm going with 2,500 and so I think every cycle that goes on in crypto is going to be harder to go higher and higher the markets are more mature there's more shorting options there's more you know options in general to short short, long, whatever, straddle, whatever your position is. I think when ETH went from $6 to $1420, there was no way to short it. It was pretty much just a Bulls game, right? And I don't think we live in that world now. I'm not expecting Bitcoin to go to 500K like some people. I'm also not expecting the same downside that we saw recently. So I think that the floor is moving up. I don't

think we're going to see 90% retraces in Bitcoin and Heath like we saw in the past. So just because I'm saying $2,500 for this cycle doesn't mean that we're going back to, you know, whatever, 200 and waiting three years. I personally think we're past that. But I think the market's a little bit more mature now where we're not going to see these absolute insane rallies. So I'll go with $2,500. $2,500 to $20K is the prediction from our three Eath Bulls. Guys, I think, this episode delivered what we promised. I think we were a bit bullish Eith. This is not the episode to listen to if you're trying to stop buying Eith. Someone recently tweeted this out that every time they listen to bank lifts, they have to buy more Eith. And I feel like this is not going to help that

individual. I feel sorry for them after listening to this. If they've got a house, they're probably going to sell it. Well, guys, it's been a fantastic year, and we are looking forward so much to 2021. Some action items, of course. This is not financial advice, but maybe you should consider some ETH for your portfolio. Obviously, of course, guys, number two, enjoy the holidays. Catch up on some previous podcasts. Follow these gentlemen.

We will include their Twitter handles in the show notes. And, of course, if you've got time, you want to give banklets a gift. you can always give us a five-star review on iTunes. How are we doing with those five-stars, David? We are not at 200 yet, and that is our near-tum girl. We want 200 five-star reviews because, let's be real here. If we get five-star reviews, more people will listen to the bankless podcast, and more people will specifically listen to this episode,

which will make ETH 10K to all of us an assured reality. So if you could go to wherever you listen to your podcast and give us those five-star reviews, so we could get ETH to 10K, that would be a, greatly appreciated by everyone here. You heard it. It's a prereq. All right, guys, risk and disclaimers,

of course, none of this was financial advice. We never claim that it was. Eith is risky. Crypto is risky. So is D-Fi. You could lose what you put in, but we are headed west.

This is the frontier. It's not for everyone. But thanks for joining us on the bankless program.