Bankless - 71 - The Bull Case For Ethereum II | DC Investor, Anthony Sassano, Cyrus Younessi

Episode Date: June 28, 2021

A lot has changed since the original "Bull Case for Ethereum" episode. This sequel comes at a time when massive events loom on the horizon. EIP-1559, the Proof-of-Stake Merge, and Layer 2 Scaling. Many of these uncertainties are felt in the market action, but we bring you some of the Ethereum Community's strongest bulls to remind you why you're here. ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ 🎖 CLAIM YOUR BADGE: https://newsletter.banklesshq.com/p/-guide-2-using-the-bankless-badge ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini  🔀 BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer  👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave  🦄 UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap  ------ 📣 Ledger | Securely Exchange with Paraswap https://bankless.cc/LedgerYT2  ------ Topics Covered: 0:00 Intro 5:30 Sassano, DC Investor, and Cyrus 7:20 Cyrus Younessi 9:58 Grading Earlier Predictions 11:37 What’s New and Exciting? 18:15 New Narratives for ETH 25:03 ETH in DeFi 29:10 Feeling the Narrative Shift 37:45 Beating the Same Drum 40:19 The Energy Debate 44:12 PoS Merge and Energy 52:30 Gas Fees & Schizophrenia 58:39 EIP-1559 1:06:26 Deflationary, Scarce ETH 1:12:05 Confidence in Execution 1:20:33 Layer 2 Summer 1:28:02 Ethereum’s Scaling Solution 1:34:29 DAOs and DOs 1:44:37 DAOs and ETH 1:50:06 Post-Mortem on 4k ETH 2:03:29 Price Predictions 2:11:48 What Else Would You Buy? 2:14:12 Shaving to Save 2:15:49 Closing & Disclaimers ------ Resources: The Bull Case for Ethereum: https://youtu.be/36HkwlqfBaQ  Ultra Sound Money: https://youtu.be/bWqhn1hXvVc  DC Investor on Twitter: https://twitter.com/iamDCinvestor?s=20  Anthony Sassano on Twitter: https://twitter.com/sassal0x?s=20  Cyrus Younessi on Twitter: https://twitter.com/cyounessi1?s=20  ----- 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 I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures 

Welcome to bankless, where we explore the frontier internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. I'm Ryan and Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. David, we're also here to help people become more bullish. More bullish on ETH. That's what this episode's about. Tell us about it. Yeah, because the world is not bullish enough on ether, the asset. This is, the Bull Case for Ethereum. Episode number two, the first we did roughly six months ago with Eric Conner,

D.C. and Anthony Sizzano. Two of those panelists got invited back because they were extra bullish on Ether. One of those panelists is now an Ethereum alumni, I will graciously call him, and has graduated from the world of content production. It is now doing his own thing.

And so in his shoes, we have brought on Cyrus UNessi, who is a former risk at Maker Dow, and now kind of doing his own thing. It has really unique and interesting perspectives that I really enjoyed his contributions into the three panelists that we had today on this show. Yeah. And the reason we're doing this again is because we like to bring on people who have been right before. And look, the Heath Bowl panel called this in December 2020, right? Heath Price is hanging in the 600s.

And they said the message was basically the world is not bullish enough. ETH and here's why, here's the case for why. Wow, so much has changed over the next six months, including ETH all-time highs above 4K. I think prices- Proving Eric Connor wrong. To be fair, Eric Conner was absolutely invited. He is just busy with other things. And Eric, we'd love to have you on again, of course, to talk about this. But yeah, so like the Eith Bulls were right. And, you know, it even overshot, I think they're wildest estimates, at least in the six-month time frame. At the speed, for sure. And so we're having them back on to talk about it.

And, you know, the story here, I think David is like, they don't feel like the story of ether is complete at all. In fact, at one point, one of the panelists said, I still think less than 10,000 people know what is about to happen to ETH the asset with these scarcity supply shocks. that are coming online. So this is the case, again, six months later, we review the progress, the narratives that have changed,

the actual dates that feel much more locked in for catalyzing events like EIP 1559, layer two, which seems like it's finally here. We even talk about the advent of Dow's. So a really great panel, and a panel I think that will make you more bullish, ETH, of course, these are permaboles too.

So if you're thinking about short-term time horizons, look, we don't know if prices going up, down, sideways, to be honest. But if you're thinking about fundamental case for why you should be bullish, Eith, this is a great episode to tune into. Yeah. And episode number two of the bull case for Ethereum implies that there's an episode number three and an episode number four. And so I think the plan is to always update

bankless podcast listeners in the world at large as to what's going on with one of the coolest crypto-economic network that's out there, in my opinion, which is Ethereum and its native asset, either the asset. So without further ado, I think we should go ahead and get right into the panel itself. But first, a moment to talk about some of these fantastic sponsors that make this show possible. Guys, we've entered a bull market. Now is the time to start building your crypto empire, and you should do it on Gemini. You already know Gemini is the world's most trusted crypto exchange, but now you can do even more than trade. You can earn. You can take one of your crypto assets and park it in an interest earning Gemini account where you can get up to 7.4%

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last time we did this was December 17th, 2020, six months ago, almost to the day. We have the same set of bulls, one new entrant, one has dropped off. We've got Anthony Sasan. One didn't make it. One didn't make it of the Daily Gway investor, Eith Bull, D.C. investor, you know him as well. He is an advisor consultant, also an Ethereum bull. And we've got Cyrus Unessy, new to the show, former make-your-risk management, advisor on the Maker Dow team, Scalar Capital, also fixed income trader. This is your Ethereum

Bull podcast. We're going to talk about the Bull case. I think I've said Bull like four times now, but this is the Bull case for Ether six months later. Guys, it is awesome to have you on the show. Welcome to Banklist. Thanks, Ryan, David. Glad to be back. Thanks, guys for having us. This is awesome. I'm very excited to get into these six months after the first one. Guys, this is great. And Cyrus, okay, so like, I think folks know Anthony from the first episode, obviously, and lots of, you know, Ethereum-based content that you produce on the daily also DC. Cyrus, tell us a bit about yourself.

It's funny. I looked at your LinkedIn profile, and you know somebody has made it when they have a crypto-punk's image as their LinkedIn profile. Your title here is NFT dealer. Cyrus, what are you up to these days? What are you doing? I mean, since Maker, like, what have you been doing in the crypto space and where have your travels led you? Sure.

I mean, brief background. I was a head of risk at the Maker Foundation for a couple of years from 2019 to 2020. Since then, just kind of working on various personal projects, doing a lot of trading and yield farming. But before Defi, I was just kind of doing trading roles at a few different trading shops. Long time Heath fans for a few years now. I'm super excited about what this community has been up to and what they're building and all that. And just the community is a very, you know, it's a pleasure to be part of it. Awesome, man.

Well, it's great to have you. And you replaced Eric Connor. David, what's the story with Eric Connor? Why couldn't he make it this time? Yeah, we want to have these episodes on a recurring basis, the bulk case to Ethereum. Because as we know, Ethereum was only six years old. So things update and things update really fast. And so we want to do these episodes on a reoccurring basis to make sure that we can stay up to date with always the changing bull case for Ethereum.

So now we are on episode number two. And the rule for the bull case for Ethereum episodes is that only Ethereum bulls can come. Wait, wait. Eric's so an Ethereum bull. What are you talking about? The least bullish person gets bumped from the Ethereum Bullcase podcast. So Eric and his price targets of last episode of 2. $2,500. Well, we hit that number. And now we need somebody even more bullish than Eric. And so we're bringing on Cyrus to fill his shoes and also offer a unique perspective in of itself as well.

This is all funny, of course, too, because Eric is proving to be rather correct in that 2,500 price prediction. We don't have to talk about that too much. Okay, we won't talk about too much about that. But well done, Eric. I'm sure you're listening to his podcast. And yeah, smiling, looking down. Yeah. Absolutely. All right, guys, well, let's talk about this. So as I said earlier, it's been six months since our first bookcase for Ether episode. And I feel like a ton has happened in the last six months. But I want to start here with maybe price predictions because we're going to start here, but we're also going to end here. If I'm recalling correctly, DC, you put out some price predictions at the end of last episode. Do you remember what those were, sir? I do. And it was a broad range. And I said 4,000 to 20,000. And lo and behold, we came really, we exceeded that 4,000 number by a little bit. So I think I was actually technically the most right, perhaps given my broad range. And yeah, so that was my prediction. Anthony, you made a price prediction as well. Do you recall what yours was? Yeah, 10K, 10K all day, every day. Same prediction I've been making. since 2019. But unfortunately, we haven't gotten to that yet.

But I'm not rolling it out for, I guess, like, if you want to call this a bull cycle, I'm not ruling that out. I think we're just recharging here. But, yeah, 10K is my top. Short term, short to medium term. All right. We're going to ask you that at the end of the episode, too, if that's changed or what. And then Cyrus, you're going to ask you the question.

But in your place, Eric Connor, of course, said 2,500, we use calling the top at 2,500 for this bull run. And I think one of the questions we have is whether we are paused for a reason. charge or whether like kind of the bull run is over as it stands or like what's happening in the market. But let's start by talking about the things we couldn't have talked about six months ago. So let's start here. What is new and exciting in your mind that has happened in the last six months since we previously did this episode? Let's start with you DC. What's going on in Heath? What's making you bullish? So a bunch of things, but I think in those six months, it's incredible to think how much has

happened in those six months. And for anyone who's watching this episode, I'd encourage you to go back and watch the original episode from six months ago to see how I think this group was spot on and a lot of things. So first and foremost, I think Ether has started to go a lot more mainstream. I guess during that time when we recorded that podcast back in December, the ratio, the ETH-BTC ratio wasn't doing particularly well. A lot of people didn't have a lot of confidence. And I think since then Ether has really proven itself, and Ethereum has proven itself. I think Ethereum has gone through a really exciting period. You could call it a manic period of adoption that range not just from people using the chain

for a lot of defy applications, but also for things like NFTs absolutely exploded. And I mean, that was just a minor talking point during our last episode. But when we hit January-February time frame, along with Defi, NFTs just absolutely blew up. And what you saw with that was a lot of new participants coming into the market, who perhaps had never participated in crypto before, weren't interested in crypto before, were now interested in something like NFTs. I mean, NFTs got so big that even Saturday Night Live did a skit on NFTs, which I'm sure a lot of the listeners of this podcast made me familiar with. But beyond that, just talking about Ethereum and Ether, you had a lot of discussion that I think was

really starting at the institutional level among even YouTubers who are focused on personal finance and other topics, starting to talk about Ethereum alongside Bitcoin. So I think a lot of what we talked about during that last podcast was Ethereum is going to start to enter the zeitgeist and go mainstream. And I think that's what's kind of happened over the last six months. And I'll even add on to that. A lot of people were skeptical and sometimes they'll are skeptical as ether as an asset or ether as a money, yet they were specifically compelled by Ether as a money because of NFTs, right? It's like, oh, NFTs are being issued on Ethereum. Ether is the thing that I need to use to play around in NFT games.

Now I can understand Ether as a store of value in currency because all of my NFTs are trading against Ether. And so NFTs did a very good job onboarding a lot of people to Ethereum just as a generalized use case, but it also did a very good job of illustrating the concept and idea of Ether as money. And I thought that was a particularly compelling aspect about the last six months. You know, NFTs made ETH money. You know, art is priced in ETH. I remember that being a meme. Yeah. And I think that that pricing still persists. There's still an open question on how much NFTs will be priced in Eith versus U.S. dollars or something like that. But I think to pull on your

point a little bit further, a lot of these new people, like Bitcoin has traditionally been the gateway crypto for a lot of new participants. And now what we're seeing is through NFTs and and things like NFTs. People are just going to go straight into Ethereum and go straight into the ecosystem and start buying Heath to participate in that. And I think that was a really interesting development. Anthony, same question to you.

What's happened in the last six months that we wouldn't have been able to predict on the last bullcase for Ethereum pod? Well, I basically kind of like mirror everything that DC said. I think that really it is the fact that Heath kind of entered that zeitgeist and we went from being a niche asset within the traditional finance space

to being more of a mainstream one here. And it's funny because when we did the last one, the last kind of bull podcast at the price was what, like $600 or something like that, I think ETH was just starting its bull run, right? We had waited for it to get over that, like those couple of humps that we had built up over the years. And then we went at 600.

Like everyone was feeling like super confident that the bull run for ETH was back on and we were going to new highs. You know, it's been very turbulent since then, but we went to 4,400, which is an incredible run. And we're still at like 2400 today. So still an incredible run. But I think that was due to a lot of that kind of like adoption as well. Like we all, I think we all kind of like saw it happening with defy initially.

And then, you know, with NFTs, I think that's what caught a lot of people off guard as well. I really do think that people are still underestimating how many new people came into the Ethereum ecosystem through NFTs. And specifically used Ether's money, as you were just saying. Because that would like everyone that had, that used Ethereum had to use ETH, not. only to buy the NFTs, but also for gas at the end of the day. And gas prices weren't cheap, right? Like, it's only recently that gas prices have gone down. For the last six months, actually, I guess five months prior, maybe not the last month, gas prices were consistently over 100 way. And people were willing to pay this because of the fact that what they were doing

on the network was valuable to them because the market was hot and they were able to kind of make money doing this. So I think that played such a huge role in ETH's kind of adoption there and ETH's price rise because all these new people coming in saw ETH as like the reserve asset of, you know, NFT kind of mania. And they were like, well, I got to get some ETH, right? I got to buy some ETH to kind of get exposure to this. And also on top of that with DFI as well, you know, just the fact that people have to buy ETH to pay gas fees, I think is just such a great kind of like marketing vehicle, really, at the end of the day. Because if they don't have to use ETH to pay fees, then they're not really getting get exposure to ETH as like the first thing that they get exposure

to. Whereas in Bitcoin, if you're, you're, you know, getting into Bitcoin, you buy a BTC. Whereas with Ethereum, you can actually get into Ethereum without buying ETH, but the common denominator across all the use cases is that you need it for those, for those fees. So I really do think that that works as a really nice social coherence tool, the fact that all the fees are in ETH. And, you know, there's some concerns that with layer twos and other scalability solutions,

that's going to be kind of taking a back seat. But I don't think so. I think that as time goes on, like, ETH as a fee token should be abstracted away generally, but we have 1-559 to make up for that, and we're going to talk about that a bit later, where the value gets captured in another way rather than in kind of like the social layer way. So, yeah, I guess, like,

I don't really have too much to add on to what D.C. said about, you know, what's happened in the last six months in terms of, like, Eath, because it really is just that more mainstream adoption at the end of the day. And I think it happened much faster than even, you know, we thought, specifically with NFTs. Yeah, absolutely. I mean, I do think that the ETH poll panel, like, man, you guys nailed it in December, right? Price at $6.50 then and, you know, not three, four months later,

where at all-time highs on ETH. So we're hoping to maybe repeat the success here and get some really bullish, exciting predictions out of you. But how about you, Cyrus? So I know you've been a long-time ether bull, not just an Ethereum bull, but an ETH the asset bull, including when it was tough to be a bull, 2018, 2019, 2020. But the last six months, at least to me, and, people have been in this space for a while, have felt really different for ETH, the asset, and for Ethereum. What's been different, Cyrus? So I think I did my, I think I did an ETH bull podcast back in 2018. And I remember back then I was talking about all of the cool things that were going to be coming into Ethereum. And now I feel like we've reached that golden age where products have

delivered, teams have shipped, all these kind of exciting things that we've been patiently waiting for are here. We're starting to use Ethereum more than just kind of speculate at the base layer. Dexes have come a long way in terms of functionality, in terms of liquidity, in UX. We're seeing lending protocols are hitting their stride. Avay and Compound have seen tremendous success. And some of these have moved to layer two. such as Polygon. And, you know, the user growth has been incredible. If you just think about that, like, you know, just a year ago,

we were still, like, struggling to teach people how to use MetaMask and how to get comfortable with wallets. And now you just see a large user base that are just kind of becoming very comfortable with the Ethereum ecosystem and the tooling around it. And then I think critically, like, all that, all those users and all that TVL has led to institutions have finally taken note. or, you know, they're just unable to ignore it any longer, right? There's just kind of just giant elephant in the room where all of these users are just

kind of seamlessly using Ethereum for an endless number of use cases. And they're, you know, they're enjoying it. And it's almost like that SpongeBob mean where institutions are like looking through the great and they're kind of like bitter about all the fun that the Ethereum users are having. And, you know, it almost feels a little bit of like a narrative capitulation. They can no longer say that, you know, these are just purely speculative use cases or that no one's using Ethereum. Like, you know, it's just amazing that everything kind of came together all at the same time. And that's just, you know, that was all in the last six months.

So Cyrus is talking about narrative. And I have felt a palpable narrative change with respect to Ethereum, but also ETH the asset. Let's talk about some like new narratives on the horizon, this ultrasound money narrative, right? institutions taking ETH as a non-sovereign store of value seriously. People like Mark Cuban coming out and saying, yeah, Bitcoin's

okay, but like I'm bullish Eith and Ethereum because of defy. This whole green energy debate as well. Like there has been a massive shift in narrative where it felt like the last two years or so prior to 2021, everything was kind of

against Ethereum. from a narrative perspective. The last six months it felt like a completely different world. Can you talk about the narrative shift that you felt or seen? Yeah, and I think, as you said, Ryan, it was really something that had started a couple of years ago where we really started to think about Ether is this important financial asset. And that's been a big mission of mine as well to help educate people about that

because I think the reality is Ether has these unique money, like or valuable asset-like properties that a lot of people haven't really understood. I think that Defi helped to open the door for people to understand that. And listeners may remember during the last bullcase for Ethereum episode where I talked about how the value of an asset is emergent in the sense of it doesn't really matter what people said it was designed to be. It's really about how people use it. And we've seen that even with Bitcoin, which was at least stated in the white paper as

peer-to-peer digital cash. Well, the network can't scale to support that use case, but it kind of had this value as digital gold, and that is really what it's being used as today. I think similarly, ether, while it is gas for the network, used to send transactions, just like Bitcoin is on the Bitcoin network, has this inherent economic or financial value to it. And when I said that Defi exposed that, what I really mean to say is it really illustrated how Ether can be used as a collateral asset. And we've seen that ever since the days of Maker, really, you know, as collateral for DFI. But I think through DFI summer, we saw that explode across the board into a lot of different use cases and how ether is like the default LP pairing on uniswap and how a tremendous

amount of ether has now been locked into DFI. I think the current number of ETH and DFI are around 10% of the supply, or it might be a little bit less than that. But also add on, you know, I think it's like $4 million that are staked right now, which is also a collateral use of the asset. So people are waking up to this idea of ether is this valuable asset. And this ultrasound money meme, I think, has been interesting and controversial in a lot of ways. And I will say, I think the controversy is good because it gets people to think about Ether than they might be used to. Whereas for the past few years, the narrative has been Ether is Gas. Now we're really thinking about it's this money.

And with EIP-1559, which I know we're going to talk about later, that's applied. is going to start to potentially deflate as the network is used more. And as that supply deflate, ether becomes more scarce. So I think we're actually on the precipice of really jumping the gap into the whole world viewing ether as the world's best kind of natively programmable asset. And I talked about during the last episode, we don't really understand how to use that kind of asset yet. But I feel like it's a unique value proposition of ether and Ethereum.

and this narrative and this opportunity is really for Ethereum to kind of seize. Cyrus, I think you have a really unique perspective here from your background with risk at MakerDAO because managing risk at MakerDAO, you really have to get down to the absolute truth of the nature and structure of these markets, right? When MakerDAO started off a single collateral die, you needed to understand the liquidity of ether and it's available, the available amount of supply and liquidity of ether on the various markets to make sure that risk of the MakerDoubt protocol would actually work, which gives you a very interesting perspective as to the nature of ether, the asset as an asset, right? Where's the

liquidity? Is it on Dex's? Like, what about AVE? What about compound? And I think you actually started off this conversation about the changing narrative of Ether because of its use cases in all these applications. How have you seen these applications engaged differently with Ether, the asset, specifically in the last six months as it relates to borrowing and lending, as it relates to Dex's, And what can you tell us about the changing market structure of Ether and how that's kind of fed into the narrative that surrounded Ether as well? Well, I think you nailed it with the liquidity aspect. So 10% or whatever of all ETH locked in smart contracts has kind of greatly bolstered the

liquidity of kind of everything in the space, right? Every new project, you know, when they launch their token, they build liquidity against ETH as an asset pair. I think for a while there in the last couple of years, there were times where people were wondering if stable coins would be kind of the native unit of account across the space and should everything be priced in USC? And ETH is just kind of another asset among many. These days, everything is kind of focuses and revolves around ETH. Users, investors, everyone are just kind of getting really comfortable with using ETH as their kind of just base asset in the ecosystem. You know, myself personally, just kind of interacting a little bit less with

stable coins as I kind of like move around between various apps. It's just kind of a change I've noticed, my own trading activity. Yeah, I think we're just kind of seeing the proliferation of ETH as kind of the liquidity anchor of all these different DFI protocols. You know, it's not like a huge change from before. We've always seen that to some extent, but it's just solidifying, right? It's just the market for the liquidity of ETH is just exploding indexes. You can buy huge size. You can sell huge size. You know, as an exercise for anyone listening, like go into the new Uniswap V3 UI and just kind of like plug in some dummy numbers. And it's it's kind of amazing that you can sell like 100 million or hundreds of millions of dollars

worth of ETH and just check out the slippage numbers for yourself. Similarly on the buy side. And I think institutions take note of this type of stuff. I mean, Elon famously said he sold a bunch of Bitcoin just to kind of test the liquidity of the market. Maybe he has to test that OTC because the quotes are, you know, maybe has to execute a trade for whatever reason. But, you know, on Ethereum, you can just kind of plug into a Dex aggregator and just see right now on the spot how much liquidity can you get out of Ethan. It's pretty hefty, I think. it's a lot more than a couple years ago when I was doing risk at maker. So we've got liquidity changes as well for ethia asset, acting more as a reserve asset for this space in defy.

And Anthony, I want to throw this question to you too because you keep a pulse, I think, on the narratives, maybe better than anybody in this space. Sort of like a Twitter meme lord, as it were, you're digesting all of this information. Do you feel that the narrative has shifted on ether and Ethereum? over the last six months, is it palpable? And in what ways has it shifted? I mean, 100%. Like, it has dramatically changed. It is, as like someone who's been around since 2017 and experienced all variety of narratives around ether's an asset, even, you know, over the last six months, it's changed so dramatically, more dramatically than I suspect that it would and faster than I

thought it would change. You know, I guess like during DFI summer, I think, I pointed DFI summer as the point where pretty much like the skeptics and the centrists in both the Bitcoin and Ethereum communities basically came over to ETH as an asset and realized the potential of it. I credit DeFi Summer to that. And then we did the, I think the podcast was in December, which was like a couple months after DeFi Summer or something like that. But since then, we've seen, yeah, I mean, it's funny because it's reflexive, right? The price goes up and then people pay more attention to it because the price is going up.

and then they try to find reasons why the price is going up. And then they see the value in it. And then they announce that they see the value in it, like Mark Cuban, for example. And then the price goes up because they announce they see the value in it. And you get this kind of reflexive action that happens. But that is the narrative shift at the end of the day. That is more and more people that are not like in the weeds, like we are realizing the value of this asset. And really making us feel like we're not crazy to think that, you know, everything that we've built as a community,

every use case, every kind of, I guess, mechanism that we're building into ETH to kind of like get accrue value to it and to kind of increase as monetary properties like 1559 and staking, that is all coming together. And, you know, for people who weren't around during the bear market, these things were a thing. Like staking has been a thing for a long time. 1559 was the thing in 2019. But if you had told like any of us like mega Eath bulls that we would get to the point where we are today in terms of like, Heath's narrative, we would have called you crazy because it was just so, so different.

Like people, even, people were using ETH as a gas token as an insult. They basically said, oh, you know, you only need ETH to pay fees on the network. It's, it's nothing special. Well, now the Ethereum community has flipped that on its head. And basically with 1-559, we basically say, well, yes, you need ETH to pay fees on the network. And that's actually going to drive value directly to ETH. And I think we were talking about the ultrasound money mean before.

that's where that's culminating as well, where people are really kind of thinking to themselves, well, you know, if Bitcoin is cap supply, that's cool and everything. But like, what if we could make it deflationary and not just like artificially? What if it went deflationary based on network activity, based on actual utility and usage and people doing things that are valuable to them? So I guess generally the narrative has changed greatly there. But the way I've always thought about ether's an asset is it's like kind of a two-pronged approach where we get the best of Bitcoin. we get the best of Ethereum and we kind of merge those together. Because the way I see BTC being valued, really it's based on a lot of faith, right?

It's based on a lot of faith that people are going to value this because they want to inflation, do an inflation hedge or they're going to believe that it's digital gold, all these sort of stuff. But there's no real utility to Bitcoin unless you bring it over to Ethereum, ironically. Whereas with Ethereum, the utility of ETH is the main value driver. But then we also have the other aspects to it where people want to buy it. as a store of value or as an inflation hedge or whatever, but the utility comes first. And I've always had the thesis for as long as I can remember that Ethereum's utility as a

network, as long as that value gets sufficiently fed into ETH, that will be EAT's main value driver. And I think we've seen that with 1559. Everyone's talking about that. I think that is a huge reason why people don't want to sell their ETH right now and I've kept stacking it, but also the staking kind of memes as well. Like the triple-havering. mean, where we're going to drop issuance by like 90% once the merge happens, those, those memes have gone extremely far. Like, I'm talking to people that aren't really like, you know, in this industry day to day, and they know about these things.

And 1559, the brand awareness around that number, like, there's no other EIP in history that people know about like 1559, not even close. Like, you know, there are other popular EIPs out there. I mean, you know, there are popular ones for different reasons. Like there's EIP 999, which is the drama around unlocking the parody funds. And that was a big deal at the time, but no one gives a shit about that anymore. Like, no one even remembers what that's about. But 1559, that has penetrated not only the rest of crypto, but outside of it as well.

And the merge and the triple harbening, all that. That has all gone outside of and gone way beyond, you know, us Ethereum, which I think just speaks to the fact that we've done our job of meming it into reality. And now the rest of the world kind of takes that away from us and basically runs with it. Anthony, am I imagining this, but like, here's what I felt like. I felt like for the first time, I mean, a core set of Heath Bulls, folks on this podcast, some other folks not on this podcast, but a relatively small set of Heath Bulls have been beating the drum around Heath is money for a very long time, like incessantly. And I felt like the first quarter and is the second

quarter of this year was the very first time that we started getting others actually believing it and beating the drum themselves. Like, it felt like this whole flywheel effect. And, you know, David and I have talked about, you know, that meme where it's like a guy at the festival, he's the only one dancing. He's like dancing solo alone. And some people join him. The more people join him pretty soon the whole fact.

I felt like for the first time the last six months, there's been a new set of people that are joining the dance party and saying these same things. And I'm talking like institutions. Like, I'm talking funds. I'm talking even leaking into mainstream media. Am I imagining this? Is this like bull goggles on? Or did this really happen, Anthony?

No, it really happened. And I actually have a perfect example here of why this happened. So one of the detractors of the ETH is money meme, Vlad Zampfia, used to work very closely with the Ethereum Foundation. He through like the last few years, and he still says it to this day that he thought that ETH wasn't money, and it's never going to be money. Well, a couple of months ago, he sold an NFT, and its unit of account was ETH, and he accepted ETH for the NFT. So, you know, even the haters using ETH as money, that's when you know you've won, right?

That's when you know the narrative is taken over, and the meme of ETH as money is a thing, but not just the meme, its utility as money is also very true. But yeah, I totally agree with you. Like, the fact that people realize that the native unit of account and kind of like a monetary value that people want to use within Ethereum is ETH, because one, it's the least amount of friction, because as I said, you have to pay gas fees, so you may as well just hold ETH for that. But two, people want to hold ETH, like as an asset. They don't want to give it up.

You know, they'll give it up if they're doing something valuable in the network because they're going to pay the fees and all that. Like, I'm sure we've all been on Fees.wtf, and we've seen how much we've paid in fees in the past. But, you know, its utility is just undeniable as money in us. And I think 90% of that is due to the NFT economy being priced in ETH. A lot of people were like, oh, okay, well, there's this new, it's like a video game, right? When you go into a video game and you basically see, okay, well, this is the native currency of the game.

It's gold. It's not like AUD or USDA or whatever. Whereas the native economic unit of the Ethereum video game, if you want to think of it like that, is EF. And people just accept that because they're used to that in other kind of worlds. And I don't think that was ever supposed to be controversial. And I don't know why people had to make it controversial. It's definitely not something that's brand new. And I think that at the same, I mean, really, without rambling too much, yeah, if you look at how people go to other countries and they just accept that this other country has a different currency to what they're used to. They're like, okay, well, I have to trade my US dollars for yen if I want to kind of do things in Japan, right? And of course, some of that's been extracted away because you can use your credit card, things like that. But the base currency is still kind of like the country's native currency. So people don't bat an eye to that. So why should people bat an eye that they have to use ETH when they're in the Ethereum economy?

So yeah, I guess like just some general thoughts there on Ether's money and why I think that generally it's become like much more of a, I guess beyond the meme, it's much more of a kind of truism now. Sarah, saw you nodding your head enthusiastically when Ryan was talking about a bunch of people starting to beat the same drum. It sounds like you got some thoughts about this. Yeah. Yeah, I do.

It's actually really funny because, you know, Ethereum community has historically never been good at memes or meming their way into anything. I mean, I think the five of us on this call have suffered through a lot of failed memes in the Ethereum community. And, you know, we appropriately got roasted for it by the broader crypto community over and over and over again. And it kind of became just a kind of running joke that the Ethereum community doesn't know how to meme. And, you know, I'll admit when I first heard the ultrasound money meme, I was, you know, I was kind of rolled my eyes like, well, here's the start of another potential. failed meme. And then I was just blown away that it caught on, you know, huge props to bankless teams and Justin Drake for kind of propagating that meme to such great success. But yeah,

it's just been really cool to see that it's almost like the team community almost finally has like support. You know, there's community backing. There's like a whole world of people out there that are kind of forming the backbone or the spine of Ethereum, and they're kind of willing to dig their heels in and say, no, no, this is, you know, this is a meme. We're sticking behind and we're going to, we're going to force this through. And, you know, to everybody's credit, it was a huge success. And I think it's just kind of a little bit of a relief that played out so well. I was just going to add a quick thought on that because I think the reason why it was successful is because the meme is starting to reflect the reality. And there's been a huge psychological shift around Ether.

because as we talked before, it's this thing that used to burn as gas and you still do spend it as gas. But now it is this asset that people are hoarding. And I think what Anthony said is really important and impactful here, because when you think about all the participants from the DFI summer period, it brought in a lot of traders and trading funds and so on, what were they all taking profits in? They're all taking profits in ether. That was the start of the shift to that psychology. You see the exact same thing among NFT flippers as well. All they can care about is accumulating more ether. And so I think this is the Ethereum-based economy is leading people to think of ether in this way. Well, while we're on the subject of narratives, we would be

remiss to miss the subject of the energy debate and the green energy consumption, because in my opinion, that's one of the big reasons as to why these markets seem to really just grind to a halt at the middle end of May. I'm of a mixed opinion about the whole green energy thing because the eco-socialists, if you want to call them that, or got their pitchforks out to go after Bitcoin, but I actually don't necessarily think Ethereum is immune to that. The obvious reason is that, you know, Ethereum is currently on proof of work. While we can say that we're transitioning to proof of stake, and we can say that Ethereum will be green, it's not yet true. And also, to some degree, I'm also not confident at all that people are ready to be able to separate Ethereum and

proof of stake from Bitcoin, but then also able to lump in, you know, DeFi and NFTs as part of a green system under a proof of stake paradigm. And all gets very confused. And, you know, good luck explaining this to all the normies out there about how like NFTs are actually green if Ethereum is proof of stake. How do you guys think about this whole like energy debate coming online into the narrative, into our industry, and then also Ethereum being this hypothetical green technology, but not yet, but then there's all this convoluted mess. Like, what's going on? D.C., let's start with you. So, you know, I'll just start off with my personal stance, which is I don't think that energy spent to secure a public blockchain is necessarily wasted. There is economic value there and

there's security there. And traditionally, proof of work has been the best way, the best technology that we've had to do that. I think as Ethereum shifts to proof of stake, the narrative is naturally going to shift with it because I think that there's, I think Justin Drake's episode, I forget the name of the episode that he did with you guys, but he really breaks down how proof of stake has the potential to be a lot more secure than proof of work. I think as people start to understand that, the massive energy used behind proof of work will be harder and more difficult to defend. I think right now, I feel like, you know, the entire industry is being painted with a broad brush and it's somewhat unfortunate. I think a lot of the ESG stuff is kind of, you know, they're kind of like garbage level

concerns where people are just kind of piling into a narrative that they don't necessarily understand. I've had these discussions with tons of NFT people or I shouldn't say NFT people, but artists who are like on Twitter and I've been talking to them about NFTs and they just don't get it. They're like, oh, do you know that each transaction spends this much energy? And it's like, well, that's not exactly how these networks work. And I do always take the time to try and explain proof of stake and how we're transitioning to this green system. But I think at the end of the day, we do need to get there, which hopefully we will in under a year. But once we get there, I think the entire discussion is going to shift in a really dramatic way in a way that's more

tethered to reality. So, Anthony, I want to ask you this question. So let's play that out a little bit. So as David set up, I mean, Bitcoin, maybe the crypto industry is facing extreme headwinds because of this energy consumption, ESG issues, right? And like, as DC just said,

the merge to proof of stake hasn't happened yet. It's maybe 12 months away, hopefully less. Hopefully Q1 2020's kind of the estimate, so maybe nine months or so away. Until that time, it feels like the industry is going to face some headwinds.

Ethereum included on this issue. But let's talk about what happens when proof of stake is activated. You know, you are a soothsayer of the narratives. So like, what do you think the narrative shift will be like when there's this transition to proof of stake? And Ethereum goes negative 99% on energy consumption. Is that going to be fuel for another bull run type narrative? Yeah. So I guess the, Sometimes I like to say that Bitcoin has headwinds and Ethereum has tail wins over, I guess, the next couple of years or so. And I do think this has a lot to do with the energy debate. Now, I don't have any strong opinions for or against here.

I do think a lot of the arguments that Bitcoin has bring up is what aboutism? Because they always point to other industries and say, well, this industry uses this much energy, you know, and it uses more than Bitcoin. Christmas lights. Yeah, Christmas lights is always the popular example. And I'm like, I think to myself, I'm like, okay, cool, but like, what is this going to do with Bitcoin? Like, Bitcoin still uses its energy. Now, to DC's point, yeah, energy use when it's put to something valuable and kind of like helps,

you know, lots of people is fine. But I don't think Bitcoin's there, yeah. And if Bitcoin was to scale to kind of like become the world's reserve currency and everyone was using it, it would use a lot more energy than it's using today. And is that kind of like worth it? Is it worth it to consume, you know, tons and tons of energy to pay system? Bitcoiners will argue, yes. I don't have a strong opinion either way right now.

But I think that the reason why I say that Bitcoin has tailwinds is, because it's much harder to explain to someone the Bitcoin kind of energy argument, like the arguments from Bitcoin is because they will come up with lots of different arguments, whether they're true or not. They're complex because they go into, okay, well, you know, the renewable energy actually powers Bitcoin mining, and all these different jurisdictions have all these different regulations around it. And, you know, there's kind of like mining moving from China to North America,

and there's like volcano mining now. So, you know, to actually explain the debate in simple terms for kind of like person that's new to crypto is very hard. And it'd be very hard to convince someone who's skeptical by going into this much detail because you're not going to get that opportunity with most people. You know, you can't win a narrative war by a complicated issue. You need a simple narrative that people can kind of understand. So that's why I think Ethereum has tailwinds here because when we do merge and people come up

to us or to anyone and say, well, you know, Ethereum is bad because it uses like this mining thing, whatever. And we can just basically hit back and say, well, no, Ethereum uses this thing called proof of stake and it doesn't use anywhere near as much energy. And that's all we have to say. We don't have to go into specifics or anything like that. We don't have to kind of have these convoluted arguments and debates with people. So I think that that is a very powerful point for Ethereum and something that's going to differentiate it greatly from Bitcoin. And I actually kind of a little bit disagree. I think with what David was saying before about

Normie's not getting this because if you look at Tezos, they have an NFT platform on there. I can't remember the exact name of it, but that's taken off lately because of the fact that they've been marketing to these kind of like energy conscious people, these EHG conscious people. And it's worked. So as I said, like the narratives and the marketing really kind of set these things. And the easier you can make a narrative to understand, the more likely it is to perpetuate and have dominance. And, well, I mean, the Tazos marketing was cringe.

Like, I saw it. It was like something about polar bears and like Tazos not killing polar bears and Ethereum killing polar bears or whatever. As cringest, we think it is, the normies don't care. Like, they just see this and they think, okay, well, you know, it's not using the energy that proof of work is using, I'm going to go use this because I'm conscious of this. Now, right now in Ethereum land, we can't do this. We can say, oh, yeah, proof of stake, the merge is coming. But as soon as you say something like the merge is coming and you have to explain what the merge

is, you've already lost 99% of people because it's too complicated. It's not surface level. They don't really care to dive deeper. So I think that once that merge happens, we're going to have a much better leg to stand on. And that goes back to why I was saying that Ethereum has tail wins, because Bitcoin has to deal with this in perpetuity. They have no plans to move to any sort of proof of stake and they're going to have to keep dealing with this narrative coming at them. And then they're going to be the lone ranger once Ethereum goes to proof of stake. Because no one cares about the smaller proof of work networks, really. It's more about just Bitcoin. And once Ethereum changes over, that's it. I think Bitcoin will just have to take all that on and Ethereum can cruise along,

you know, just nicely and not have to deal with these narratives anymore. Pent up narrative energy. Cyrus, do you have anything to add to that? So I agree with a lot of the points Anthony made. One couple in particular that I want to point out is that, yeah, once you have to start explaining these things to people, 99% of people drop out. And I think that kind of brings up an interesting point about whether events are priced in or not. So I remember when the beacon chain launched in December, even in like the two weeks before launch, there kind of really wasn't that much buzz or hype about it. And people were even wondering if it was even actually getting activated on time. It felt quiet. And then as soon as it flipped on, everybody all of a sudden said, you know, holy crap, this is live.

It's here. And there was no more having to say, well, it's coming soon. It was actually here. And the market blew up. And I think we're, you know, my hypothesis is that we're going to witness the same thing again with the IP 1559, which is, you know, right now there's just a lot of talk. But people want to see it in action. They want to see what the fever looks like.

And once they do, I expect them to receive it well. And then I think kind of the granddaddy of it all. will be when that merge finally comes, when the Ethereum community can finally resoundfully say, we are on proof of stake, there's no more energy concerns, there's no more ESG concerns. I think a giant light switch is going to flip in everybody's minds, including the institutional investors who, you know, for whatever reason, take the ESG stuff very seriously. You know, the BlackRock CEO talks about ESD a lot. There's a lot of prominent money managers that treat this issue very seriously. And I think it just, I mean, I think it's hard to

overstate how tremendous the tailwind is for Ethereum when that day comes. I think it's a little bit hard to kind of push that optimism today. But, you know, I can wait, right? We've all been waiting like five years for this thing to come. If it takes another year or whatever, that's fine. We'll wait. And then when it comes, it'll be, it'll be interesting. But I think what the bigger problem is for the Bitcoin community is that, you know, I don't really see the ESG. FUD going away. I mean, in fact, it's just gotten stronger and stronger over time. It's, if anything, all of the educational campaigns and the articles and the interviews and everything, I don't feel like it's really done much to kind of alleviate people's concerns over the energy

component. And I don't know. I mean, it's up to them to figure that out. I just feel like it's a pretty tough gig. Hey, guys, I hope you're enjoying the conversation thus far. In the second half of the show, we bring up the conversation of EIP-1559 and the also very low gas fees that we've been experiencing lately and perhaps the emergence of a lot of people showing up on L2s in staying there. What does that mean for EIP-1559 when it comes to burning ether? Are we going to be burning less ether than we thought? Or what's the story here? And then we also ask the guests what they think about the whole layer to summer idea

or the idea that there's going to be a ton of yield farming on a bunch of, of different layer twos in order to help distribute the tokens for the L2s, as well as the tokens of the defy apps. We also touch on DAWs and digital organizations and what the panelists think about the rise of DAWS that we've seen in the last quarter or so. We then finish up, of course, with some price predictions, which turns into actually a pretty interesting conversation about, and I'll give you a little tease here about how and why Cyrus doesn't give out price predictions. and it turns into a longer conversation than I thought was originally coming, but it was actually very interesting. And I think you guys are really going to enjoy it.

But first, before we get there, we have to take a moment and talk about some of these fantastic sponsors that make this show possible. AVE is a borrowing and lending protocol on Ethereum and just recently released Avey Version 2, which has a ton of cool new features that makes using Avey even more powerful. With Avey, you can leverage the full power of DFI money-like,

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Everyone was really excited about EIP. Well, not everyone, but the people that really care about Ether as a monetary asset got really, really excited about EIP-1559 back when GUE gas prices were 200, 300, 400, gas. But lately, especially in the last two, three weeks, gas prices have been consistently below 20 guay. And under this current market structure, we actually wouldn't be burning all that much eth, at least in comparison to what historically we would have been burning throughout most of

2021. So has your outlook changed about EIP-1559 and how much ether it would actually burn because of these lower gas fees that we've experienced in the last like two, three, four weeks? I mean, I think the community is certainly experiencing some schizophrenia with respect to whether they want high fees or low fees. You know, high fees is more burned, but horrible user experience. You know, the Bitcoin community has the same, right? Like, you know, some of their core devs famously celebrated high fees because it kind of

is that the security can maintain itself. Here's the thing. Ultimately, like the demand that's pouring into Ethereum, I think, is hard to predict. I don't think we should count our chickens too early with respect to low gas fees. We could see ourselves in a 1,000-gway environment again before we know it, and then we will all be begging to see low fees again. I think we just want to strike a harmony between issuance, U.S., fees, burn. Right?

Like, we can't say we want super high fees for maximum burn, but also have like an incredibly good U.S. for users, especially, you know, new users who don't have, like, you know, not necessarily early to the space and just can't afford high. fees in the first place. We can't have it all, right? And I think all we can hope for is to just strike a good balance between everything that's, that kind of creates a consistent narrative, kind of an egalitarian system where high fees are paid when it's appropriate to do so, and that goes into the burn pile. But in times of kind of smaller usage, you know, we should,

we should celebrate users paying low fees and being able to onboard more users and create more adoption and so forth. So that line that Cyrus has just mentioned, DC really resonated with me that like the schizophrenia line because sometimes, God, I feel like it's damned if you do, damned if you don't with Ethereum. Like, I'm on the skeptics, right? So like gas fees are high because everyone in the world wants Ethereum block space. And people act like that is the worst thing ever. And this is why the Eith killers are going to win.

And other layer ones are going to like slay ETH and it's never going to scale, never going to work. Now we've got Eith gas fees. they've gone low, possibly because we're doing things like FlashBots, right? So helping solve the MEV problem. We also have some layer 2 solutions coming online, some sign chains coming online. And now they're like, well, you know, no one wants ETH block space. So I kind of take the reverse of that. And I'm sure the bull panel here does too, which is like, if gas fees are high, awesome.

Why? Because EIP 1559. If gas fees are low, awesome. because cheaper transactions for the masses, what's your take? And take a look at this holistically for us, do you see? EIP 1559 as a mechanism is the first time ether will actually be burnt, to Anthony's point,

as the network is used more. What does this mean for Ethereum in the bull case? Yeah, I wrote a tweet a couple of days ago where I said, you know, when gas fees were high, everyone was saying Ethereum was dead, and when the low, everyone says Ethereum is dead. And maybe people just don't know what they're talking about at the end of the day. So here's my take on this.

I think 1559 is an elegant mechanism, regardless of how much ether it actually burns. Because one, it's still going to reduce the amount of minor selling on a regular basis because of how the burning mechanism works. And two, you know, when you think about the burning component of it, it's not necessarily about deflating the supply in a significant way. There will be periods when the supply will deflate significantly that correspond with greater usage. But it's all about helping to keep the supply in check, right? So we will, on a fairly regular basis, either reduce that inflation or eliminate it completely

through or the new issuance of supply. We're negating it basically. And I think that's still important. I also think I just, I do want to talk about the UX improvement for a second because I know it gets glossed over sometimes, but the idea of having a user. be able to submit a transaction and having a high degree liability that's going to be included in the next block is actually really huge. I mean, that is one of the biggest barriers.

Anyone, I know the five of us, but anyone who's listening to this podcast, who's introduced Ethereum to a friend, and they've hit a stuck transaction because they put it right when fees were going up and, you know, they didn't know how to cancel it or speed it up. I mean, those types of things are going to be a thing of the past for the most part. And it's also really useful for roll-ups, which I think are actually going to stack additively with EIP 1559. But roll-ups need that assurance of getting those transactions in in the next block. And EIP 1559 is going to let us do that. So I'm going to counter what Cyrus said is we can't have it all.

I actually think with layer two, we can have it all. I think eventually over time, fees on layer one will probably tend towards being more expensive. And I will say, so imagine this. Imagine we're in an L2-centric world, right? And L-2 is layer two for those who may not be aware. But really what layer two's roll-ups do is they increase the density of transactions that are possible on layer one. So in the same space that you would have had one transaction on layer one before,

in an L-2, I think of almost like a skyscraper, you now have dozens or hundreds of transactions in that same amount of block space. So you're increasing that density. So what are those? So if we start having a whole bunch of roll-ups, eventually on Ethereum, say five years from now, guess what? They're all going to be willing and able to pay much higher gas fees on layer one. And if there's enough of them and if there's enough demand to use the chain, they're going

to have to. So I think the play on EIP 1559 is actually a really long, multi-year play where we look at, where we look at layer one evolve into kind of this trust layer. And the value of that trust layer actually will go up over time, is my hypothesis. I can definitely vibe with that. Anthony, I know you got thoughts. Let me hear him. I got thoughts. So the way I think about the schizophrenia that people are feeling is that this is the crux of it. High individual fees are bad, right? High fees for end users are bad. High aggregate fees are good. And this is talking to what DC was just saying about roll-ups being the ones that are going to demand the block space. Now, as DC was

saying, what are roll-ups? They're basically just, you know, hundreds, if not thousands of transactions that get compressed into one that gets posted to the Ethereum blockchain. So the way I view layer one and the way I view the fees being paid there is that people are willing to pay high fees when they're going to get economic value out of it. So we could typically see the fees go much higher during market volatility to the upside because there's so much money to be made. Everyone's having a great time. You know, you don't care that you have to pay $50 to harvest yields because you just made

like a few hundred dollars in a day and it's all just like free money to you at the end of the day. also people paying the fees have been holding ETH for a while. So to them, it doesn't feel like a lot because they've made a lot of money from ETH already, ETH going up in value. So that is a temporary phenomenon, I believe. I think the long term is that the highest value transactions that are going to be on layer one will be those roll-up proofs. Roll-up providers are going to pay whatever is necessary to get their transactions into a block.

And eventually we're going to have so many roll-ups that that's going to be what layer one is. It's just going to be a security chain for these roll-up transactions, and there might be some whales playing in the waters there still. But most users, majority, 99% of users are going to sit at layer two, and they will still be fueling the layer one's kind of fee revenue because they're using these layer twos, but the individual fees for them are going to be very, very, very low compared to individual fees on layer one.

So we have the aggregate fees on layer one still being high. We have a nice fee burn going on perpetually. I think what people forget is that just because the fees are maybe not going to be high when 1-559 goes live, doesn't mean that they're not going to be high in the future and doesn't mean that we're still not burning a lot of ETH. I mean, even at today's gas prices, we're still burning $5, not $5 million. We're still doing $5 million of fee revenue, most of that which will be burned. And I saw a statistic the other day that someone said that at post-merge, even at 10-Gway as an average gas price, ETH will become deflationary because the issuance are under proof of stake is much,

lower. So we only need 10 guay, whereas in proof of work, we need like 100 guay for that to work. Now, I think 10 guay or like the prices that we're seeing today are just like a short-term thing. I think that as these roll-ups come online in a very big way, they're going to eat into this block space and basically be the only things on there. And that's okay. That's the way that Ethereum is designed. Ethereum is not designed where layer one should be where everyone sits and we're not scaling via layer one for the world. Layer one scaling and improvements to layer 1 are to service the layer 2 ecosystem

where all these other teams will be deploying onto, you know, we're already seeing them deploy onto that as well. So I just take that kind of view and I mean, I always take the long-term view here. And if the market hits up again, we're still not in a world where

the layer 2 ecosystem is anywhere near mature enough to kind of like capture all of this. It will still be captured by a layer 1 and users will be happy to pay 100 way fees again because they're making money. I mean, I made a joke tweet once where I said that people complaining about gas fees as they go to cash out on some Unisob gem that just 5x in a week. It's just, it's always hilarious when I see that.

It's like, well, you know, the fact that you're willing to pay the fee in the first place means that the transaction is worth more to you than the fee is because you wouldn't be paying a $50 fee to get $10 of economic activity out of it because that's just not logical to do so. Unless it was, maybe it was an NFT that you really valued personally or something. But normally, you're not going to pay $50 to trade a token from, you know, that token to EF if it's only $20 worth of that token because there's just no point in doing that. So that's how I kind of think about the layer one, layer two dynamic and how that eventually users are just not going to even care about like those layer one fees anymore.

And their roll-ups are going to be the ones that are posting the transactions and paying whatever fees necessary to get into that block space, which is where the long term nice fee burn is going to come from with 1559. So this panel has mentioned layer two a whole bunch and we need to dig into layer. too, but before we do, I want to camp in on something you said. So you said, Anthony, that even at 10 gway gas fees, post-merge, ETH is still deflationary. It's still ultrasound money. And I'm wondering if you could help square this. So David and I were on a recent podcast we did with the Bitcoiner, Preston Pish, and he described himself as kind of like, not quite his

words, but I think I'm summing it up accurately. It's like a scarcity maximumist. Basically, I believe in the stock-to-flow ratio. And I believe Bitcoin price go up because miners have less Bitcoin to sell. And so we kind of presented the case of like, hey, have you heard about the triple app? Like in Ethereum, have you heard about EIP 1559? Have you heard about the merge and how issuance drops to 1% and then perhaps goes deflationary with EIP 1559 fees? If you are a scarcity maximalist friend, like take a look at this ultra scarce asset. The reason I still feel super bullish on Eith, Anthony, is because I don't feel like we've had some successes in the last six month, but I still don't feel like people understand this narrative. Like, there's still maybe

under 10,000 of us who actually understand what is about to happen. So many people understand every four years is a Bitcoin happening. And they're like, okay, every four years, it's bullish Bitcoin. Okay, I get that. Almost no one still understands the scarcity catalysts that are about to be dropped like an atomic bomb on Ethereum. Like, can you reflect on that? It's like, what's, what, it just doesn't make sense. That conversation with Preston did not make sense to me. And I'm wondering if you could make some sense of it.

So I think I can. And one thing I want to push back on is people who say they're scarcity maximalists, because scarcity is only one side of the coin. If there's no demand for your scarce asset that you think is scarce and whatever, then it doesn't really matter. Like you can print a token on Ethereum and make a hundred of them. But if no one wants it, then it's not scarce. right? Like just because not much is available to buy doesn't mean anything. So I think being a

scarcity maximumus is a bit of a funny thing that Bitcoin has liked to say. But in saying that, scarcity is good when it has a demand side. And that's exactly what Ethereum is going to have with, I mean, it already has that. But with one five, five nine, we basically channel that demand side into driving value to Eath as an asset here. So on your point about who understands this, I mean, I think it's way less than 10,000 people who actually understand the implications of a ultrasound money world, which basically just describes the world post-159 and post-merge. And that has been my thesis for ETH for a very long time, is that if it takes, you know, a while for people to clue into this, that's fine. But by the time we get to the point where the majority have clued into it,

ETH price is going to be like, you know, much higher than what it is previously. And that's why I was buying ETH during the bear market, you know, 1 to 200 range. We sat there for a long time. I was buying Heath there with the thesis that people are going to discover staking and it drives value to Heath. And I believe that proof of stake was going to happen. A lot of people didn't. A lot of people still don't because they think that real proof of stake is when the merge goes through. And same with 1559. I remember having arguments in late 2020 or debates on Twitter with smart people who were saying that you're betting on 1559 being delivered, you're betting on staking being delivered. It's like, yeah, but isn't that investing? When you invest in something and you're

look, having an outlook on the future, you're betting that these things are going to be delivered. Even with Bitcoin, you're betting that more and more people are going to buy Bitcoin and it's going to increase the scarcity because more of it gets taken out of circulating supply. So at the end of the day, if you're a good investor, you don't wait for things to happen. You do it before it happens. And, you know, 1-559, April 2019 was when the EIP was first proposed. I think ETH was trading at like $200 or something back then. So if you had bought then with the thesis that $1.559 would be delivered, you'd be doing really well. But if you had waited until the official kind of date was given or maybe not so much the

date, but if you waited until that was merged into the network, you would be buying Ether at least 10x. I can't remember the exact price, but at least 10x of what it was then. So if you're a scarcity maximalist, that's fine, but you have to account for the demand side as well. And I think that the demand side really is that awareness side at the end of the day. Like if you think that more and more people are going to come into Bitcoin because most people don't own it, well, then you should be thinking that a business.

about Ethereum because to me, there's just many more ways for people to get into Ethereum and many more ways for people to use ETH because there's defy and NFTs and DOWs and like everything like that. So if you're a scarcity maximalist, then you should definitely look into ultrasound money. It's not just the meme. It accurately describes exactly what Ethereum is gunning for here. And if you wait until this happens because you're skeptical that it will happen, well, then you're just giving up all the alpha to everyone else. Like, Heath could be 10K by the time the merger goes through. Like, that's not far fetched to say, because you're, you're not far-fetched to say, because the merger is slated for Q1, 2022.

So, and that's like nine months away from now or something like that. So from that perspective, if people really are scarcity maximalists, then they should definitely look at, look at Eith and the ultrasound money stuff. But I guess that there's priors there as well. You know, a lot of scarcity maximalists are Bitcoin maximalist, and they think Ethereum is a scam no matter what. So that's fine. They can think that, you know, maybe the flipping thing will happen and then they'll shut up about

Ethereum being a scam. We said that for it. Yeah, I just said it. Now it's cursed. Okay, so like I want to get this just a quick poll from our ethible panelists. So confidence that both EIP 1559 happens and the merge happens within the next nine months to 18 months. We'll get to large with because to Cyrus's point, we're happy to wait too. But nine to 18 months, confidence that these two things will happen. D.C., what's your confidence out of 100%? How confident are you? I don't want to say 100%. So I'm going to say 99%. And 99%. Anthony, how about you? Yeah, same thing, 99% only because, you know, the world could end and it's not 100%. Cyrus, what about you? How confident.

I mean, EIP 1559 for sure will happen in that time span. You know, I don't want to get kicked off the panel for saying this, but 18 months for the merge, maybe, hopefully. You know, I think currently the estimates in hearing are Q1. So that's roughly six to nine months. With another tolerance span of another six to nine months, then yeah, it should happen. But we should all be cognizant of, you know, fairly difficult technical lift. Throw a percentage out. I know you are risk manager, make or down.

Sure. I'll say like 75%. Okay. All of us highly confident. All of us highly confident. David. Something I always think is pretty funny when Bitcoiners and other people that want to just dead on Ethereum and or just generally Ethereum naysayers. They say like, well, you know, the merge is going to

come and like, you know, what if something goes wrong, right? What if, what if something breaks? And, you know, oh no, then it's broken. And I think people really just kind of forget to think about, like, well, if it doesn't go right, we'll fix it. Like, we'll just figure it out. I mean, there's a number. It's hard to, like, you know, ideate and like, you know, conceptualize about a hypothetical breaking scenario. But the last thing I'll ever want to do is to bet against Ethereum developers. And, you know, it really depends on if we're talking about a breaking scenario, how that break actually happens. But there's numerous different ways to route around a problem. And so if something goes wrong, it's not the end-all be-all. It's not like, oh, well, guess that we tried that.

Like, I guess we can't do that anymore. I was like, no, we'll just do it again. And we'll try again later. And so the question of like, if we don't get it right the first time has never, ever been like a sensical one to me. And I keep hearing it from different Bitcoiners all the time. It's like, oh, yeah, the technical like complexity and the execution risk is so incredibly high that I just can't bet on Ethereum. This is what Preston Pitch was saying on our podcast. He's like, the technical risk is too high. Well, the technical risk is high if you are thinking that it's a one shot and you only have one shot. And people are forgetting like, no, we have as many shots as it'll take to get the job.

job done. Do you guys feel, I feel like I'm taking crazy pills. Can you guys like reflect on this with me? Anthony, do you have any thoughts? I mean, yeah. And this is like, I guess, so you can't reason with someone's argument if they haven't used reason to get into that argument, right? And by saying stuff like if something goes wrong and that's it, it can't be fixed, well, you haven't used reason to get into that argument because that has never happened in the history of humanity where we've given up on something just because it went wrong the first time. If we did that, then we wouldn't even be anywhere near where we are today. We probably would have been wiped out because we wouldn't have evolved, right? The way technology works is a process of trial and error, trial and error,

like 100,000, tens of thousands, tens of thousands, millions of times over and over and over again. That's played out across every kind of technology in history. That has played out within Ethereum on basically speed running it. I mean, Ethereum is speed running finance at the end of the day. And that's what we need to get there. Now, to say, and that's not to say that we should have like an error when we do the merge. Like, hopefully it goes through like perfectly. the first time. But the thing is, is that we're not doing the merge, the main net merge before we've done test nets. And we've already started doing test nets. We've already proved that it can work. And we're going to do more and more rigorous testing here. There's going to be, you know, audits. There's going to be

like people looking at the code, like, you know, lots of people looking at the code, making sure everything's fine. There's going to be, you know, a ton of effort that goes into it before we even get to the point where we do a main net launch. And for people to say, oh, well, you know, none of it was tested or there's a higher chance it can fail. Well, it's like, this is why we do this. the test things because we know there's a high chance it can fail. So let's make, let's lower that chance as much as possible. And that's exactly what played out with the beacon chain. There was tons of test nets for the beacon chain. And then once we got to the main net, it launched perfectly. Like literally, it was the perfect launch. Everything went right. Like nothing could

have gone better with that launch. So if we can replicate that with the merge, which I believe we will, and I believe the merge is actually more important to get right than the beacon chain launching was because we are merging in a, you know, a massive network. I think that a, it's going to be fine. I don't foresee something like going wrong. I think that there's a small chance of something could go wrong. But in saying that, as you said, David, we can come back from that. We can rebuild. It's not a death now. It's not like the network, the Ethereum network is dead in its tracks. And I think Bitcoiners know this because if something went wrong with Bitcoin, it's the same thing. They would just basically go back and fix it. And, you know, it doesn't matter

if it's against their principles to roll back the chain or whatever. If it put the network at critical risk, if the network was basically going to die if they didn't do this, they would do it. Like, just look at what people do and not what they say at the end of the day. I think is the rule of thumb here. But, yeah, I guess like those are my general thoughts on this. Maybe DC has something to say here. Yeah, I've got a couple of thoughts.

And, you know, some people may not be aware, but I'm actually a participant in some of the merge calls and discussions. And Justin Drake and Danny Ryan asked me to participate in those as kind of a community advisor. So I'm going to give a little bit of context behind why I think 99% over the next, you know, 18 months as Ryan threw out. But first, I think the hardest part is actually already done, which was getting the beacon chain up. And the beacon chain really represents this bonded validator network.

And I just checked the deposit contract. So there's 5.6 million ether in the deposit contract. Wow. That is that's a staggering number. So that's over $10 billion worth of economic value based on current ETH prices. Those people, that is basically a bond on this getting done. If that doesn't get done, if the net. network is not merged, those either are going to remain frozen forever. So that's a huge

economic bounty to actually get the work done. But I think the other thing that's really important in this discussion is the development teams are having really serious conversations now around. Once we get through the upcoming hard fork in July, maybe there's going to be one more kind of limited feature fork after that, one or two months after that. But after that, the likely situation is both the Legacy ETH1 and Legacy ETH2 teams basically are going to merge together and they are not going to do anything else except focus on the merge. There's a lot of, there's a tremendous amount of energy and enthusiasm around this. People understand the urgency.

People understand the ESG discussions that are happening across the space. People understand that this is Ethereum's moment. So, yes, there could always be technical difficulties that arise, but there's been also a lot of encouraging results from even the Heath Global Scaling Hackathon where they were able to get some of these clients to talk to one another in a really rudimentary way. So I don't know, I'm pretty optimistic on even a one-year time frame and obviously fingers crossed, but that's really what I'm going to be looking for.

Yeah, I think to your point for me personally to you, like DC, like once the beacon chain shipped and it went well, the execution risk for Ethereum, ETH2, as we've called it, precipitously dropped in my mind. Like, that was the hardest part of this whole thing. That was the thing no one said could be done for the last two years. And that was done. And that feels like the hard part. We'll see where we go from here.

The other thing, want to talk about this because you guys have brought this up several times during the course of the conversation is layer two. David and I have called kind of a layer two summer maybe around the corner, right? It's summertime. And it feels like finally layer two on Ethereum is, starting to ship. Starting ship some cool things. Like optimism has been delayed, but here's Arbitrum coming up with a deployment that will probably cut the ticker tape in the next weeks to months with Defy apps. Let's talk about this. Layer 2 summer. What do you think about

that? Is Layer 2 finally here? And is this the solution that Ethereum's been looking for from a scalability perspective? Let's start with you, D.C. So I think that summer and I'll just, you know, in the northern hemisphere, we're at the start of summer right now maybe a little too soon for us to really look at the results from this, but I think certainly by the fall time frame, so let's say October, September to October timeframe, things are really going to heat up. So I think Arbitrum is already now in a limited developer release where developers are exploring, developing on the platform. Optimism is kind of in a similar boat that hasn't expanded quite as much. But an arbitraram is actually operating on main net so people can start

to kind of see how it works. I think in order for it to hit, we need both of those live, most likely. And I think what is it going to look like? So first, imagine that you're going to be able to do a lot of traditional activities like trading and other types of stuff that you're doing on chain today. You'll be able to do it on L2 a lot cheaper. Potentially, I think the gas cost will be somewhere between one-tenth to one-twentieth of what a similar transaction would be on-chain. It depends on the transaction, but I think that's a pretty good rough order of magnitude in terms of how much cheaper you can expect. At first, I thought it was going to be hard to get people to use some of these L-2s, which in the properties of L-2s, by the way,

are they mathematically secured by layer one. And so they basically have the same security guarantees as a transaction on layer one. And so I thought it would be awkward at first. But after seeing how much side chains have taken off like Polygon, even like you could even call buying a smart chain, a side chain of Ethereum because it runs EVM. People don't have a problem using some of these other platforms. So I think L2 will take off. And I think institutions and big players will be willing to deposit millions or even billions of dollars into these L2 platforms. It could be awkward at first. I think we're going to see a little bit of awkwardness in terms of, well, you know, which roll up or is this app on and how do we work together?

But I actually don't think it's going to be as bad as people think because, one, a lot of the value that apps have on Ethereum is represented in kind of what I'll call like a rap token. You know, it's this portable token, this portable value that embodies the app's functionality. And those can just move over to L2 without any additional trust assumptions. So if you're using a yearn vault, maybe you're not depositing directly into the vault. Maybe you're buying one of the vault tokens, and arbitrage bots are managing the deposit of additional funds into a yearn vault for you. And you can take that application and expand it. I think what I'm most excited about for L2 summer, fall, whenever it is, is there's going to be a new Cambrian explosion of development on Ethereum.

Because the design space is about to get a whole lot bigger because things that may not have been cost effective before, all of a sudden are cost effective. So I'm going to be looking at stuff like smart contract wallets. I think smart contract wallets could become the default on layer two because it will actually be cheap enough to do that. And that will also help onboard more mainstream users. I think apps are going to be able to do a lot of other things, experimenting with higher throughput and cheaper transactions. And I think we're still going to see a successful side chain ecosystem with chains like Polygon for activities which may not require the same security as L1 or L2. Part of the Defy Summer meme is partly an allusion to how we are coming up on summertime, at least in the northern hemisphere. Anthony will make sure to let you know that it's not summer everywhere.

But it's also an allusion to Defy Summer 1.0, which is the, it just happened to happen in summer, but it was really more of a speculative yield farming, you know, mania of sorts. And really, it was a story of a bunch of applications distributing their token. And kind of the DeFi Summer thesis is that, Well, these L2s are probably going to have tokens. People have the incentive to issue tokens. People like tokens. Therefore, they're going to issue tokens.

Therefore, there's going to be this yield farming speculative bubble that comes and arises on specifically L2s. So, Cyrus, I actually want to turn this question to you because I do believe that you perhaps dabble in the whole yield farming universe. Is this something that you see on the horizon? Is this something that you are preparing for? How does the whole DeFi Summer yield farming on L2's narrative land with you? Is that something that is valid in your mind? Yeah. So I feel like there is an enormous amount of capital on the sidelines right now that are,

they're not comfortable with bridging to the Binance smart chain because of centralization concerns. They're not comfortable moving over to other L1 chains such as Solana, which would maybe require them to divest their eth and kind of purchase a new, like a little of token. And, you know, they may not be comfortable with kind of the tradeoffs of some of the current popular side chains. I think, I think there's a lot of capital waiting for this kind of silver bullet, um, L2 solutions, such as optimism, arbitram. I think once that happens, I think, um, I think we'll see a lot of TVL very, very quickly following afterwards. Um, I think, I think I'm most excited about kind of what it means for kind of reclaiming some of the lost users. So I think a lot of

Defi summer farms was maybe not the not the most economically meaningful activity. I mean, I'm just kind of thinking back to a lot of the food farms and all that. Like I'm not trying to like recreate, you know, the magic of food farms on on this new L2 summer. I want to just, you know, for me, L2 summer is just bringing users back to do normal things. just kind of using Maker, using compound, using AVE, bringing back the lost users, I mean, arguably, if we're bringing in kind of, you know, a ton of more capital and ton of more users and that would be bad for yields, you know, it would kind of be like the opposite of DFI summer,

which to me meant like astronomical yields and a lot of kind of scamy, scummy types of projects. I just want to see more users and more kind of DFI for the masses. I think that would be a more accurate description of success than just these weird farms that we typically see. Anthony, so I have two questions for you about layer two and about layer two summary. So the first is this. Is this Ethereum's scalability solution? I don't want to say the silver bullet, but is this basically how Ethereum is going to scale?

Are you bullish on the current iteration of layer two is to do that? And the second is, what about this problem that some see where the economic transaction activity starts to happen on layer 2s and not Ethereum main net? Does that decrease block space value on Ethereum and erode sort of the value proposition of things like EIP 1559? I know you partially address that, but I want you to maybe more comprehensively address it there. So those two questions. Is this Ethereum scalability silver bullet and does it erode? mean net blocks base value. So I want to start by saying that nothing is a silver bullet ever in this technology.

And I think people should really come to terms with that. Because I think sometimes the narratives get ahead of the technology and people view things as like a silver bullet, as if we'll flip a switch and all these problems will be solved. I don't think that is the case here. In saying that, obviously I'm extremely bullish on layer two technologies. I think that roll-ups, at least for the foreseeable future, are the way we're going to go. Maybe we discover something better than a roll-up. I mean, there's other constructions out there, like Validium from Starkware and ZK Portar,

which are like hybrid solutions, which achieve more scalability, but you get less kind of like security because instead of all the data being on chain, it is posted off chain as part of some data availability committee, and you do all this fancy cryptography stuff to make sure that's fine. I'm not going to go to the details there, but essentially for the foreseeable future, roll-ups are the way to go. Now, I was listening to the Arbitrum guys on your podcast recently, on the Bankless podcast, where they said that, you know, if we had all these roll-ups live, the most TPS we could get across all of them, if we filled up Ethereum's block space, would be 4,500 transactions per second,

because at the end of the day, layer two's are still limited by layer one scalability, because layer one can only do 14 transactions per second, and depending on the transactions that you do, the cost is going to go up because of the way gas works and all that sort of stuff there. So from that point of view, I do think that layer twos are going to greatly help with the scalability challenges that Ethereum is facing, but we need layer 1 scaling on top of that as well. We need things like sharding that enhance layer 2 scalability, and we need things like statelessness for people who aren't aware of that. That's an initiative to basically make Ethereum a stateless system, which means that we can basically raise the gas limit much higher than it is today because you don't

have to account for the state growth. Now, you can Google that if you want to learn more about it, but that's another significant thing that's coming to Ethereum scalability. So I think really there's no silver bullet. The way forward is just to do as much scaling as we can do on layer one while preserving their decentralization and security, but also leverage the layer two ecosystem to give us like 100,000 times throughput that will get on layer one.

And I think that layer two is really going to shine once sharding comes in because we're going to have a greater increase in throughput because of that. But in saying that, I don't think that there's going to be, you know, enough demand to fill all the layer twos to the brim and to make layer twos kind of start reaching their limits in the short to medium term. I do think that people still underestimate kind of like how, I guess like, I guess like how long it's going to take for this stuff to play out.

Like, yes, we get pockets of manias that last, you know, manias can last a little while. But once the manias subside, we've seen what happens. Like most users simply just leave. And I think the way I measure mania is by the gas prices on Ethereum now. Because during the hot market, like, as I said, people are happy to pay 200 way, 300-gway, whatever. But now when the market's quiet, like, people aren't paying that anymore because there's no reason to. So we're at Tengue. And that came down pretty dramatically as the

market came down. So pretty much correlated. So that kind of like, I think answers the first part to the second part of your question about, you know, people concerns, like I saw some concerns that layer one would become like a ghost chain because everyone's going to be at layer two. Well, this goes back to what I was saying previously about how layer two transactions, roll-up transactions are the most valuable things that are going to be posted to Ethereum layer one. nothing is more valuable than wrapping thousands of user transactions from layer two and posting a proof of that to secure it on layer one. So from that point of view, roll-ups transactions and roll-up proofs, we're eventually going to push out everyone from layer one anyway because they are happy to pay hundreds of dollars in fees, thousands of dollars, tens of thousands a day. They're happy with that because they know that that is coming from the layer two security.

And in aggregate, and as I was saying before, the users are paying small individual fees on layer two, but in aggregate, those fees are going towards paying layer one security because in aggregate, they're still high. So I think people just need to kind of like take a bit of a zoomed out view here and look at what long term layer one's going to be and read kind of research pros from Vitalik called Ethereum a roll-up centric roadmap. That is exactly what's going to happen. Roll-ups are going to be the dominant transactions on layer one. They're going to push out everything else because it's a competitive network and they're going to be competing. They're going to be happy to pay higher fees than other users. And that is how the system has been designed. So from that

point of view, I think that people calling layer one is going to be a ghost chain because everyone moves to layer two. I think maybe in the short term we'll still see lower fees because there's not that many roll-up transactions yet. But as we kind of scale out, as this kind of stuff gets, you know, so in demand that we have literally millions of transactions per second, sorry, demand or something like one day, then we're going to get to that point where layer one is so kind of like constrained, that roll-ups are the literally even the whales won't even be able to afford it anymore. It'll just be roll-ups. So a future where 1,000, 2,000, 3,000 way is a norm is not too far away, but that's not what users have to pay. That will be what the layer two roll-ups will have to pay to secure

themselves. And the users will just be paying the smaller fees on layer two, which in aggregate will go to securing on layer one. So hopefully that kind of like covers that concern as well. But I do think generally people should just take a longer-term view on this sort of stuff. And forget the noise, forget the short-term stuff. Like, it has no bearing on the long-term vision here. Guys, we are coming down to the close of this interview. And we want to return back to ether and markets. But before we get there, we would be remiss to talk about one of the big stories of 2021,

which is DAOs and digital organization. We have seen a ton of DAO's crop up in the last few months. Bankless Dow is one of them. Gatecoin Dow is another one. And interestingly, notably, I would like to, plant a flag and say like a lot of the DAOs that have come out recently are specifically what I'm calling off-chain DAOs, as in specifically materially different from DAOs like YERN or UNISWOP, which control smart contracts on Ethereum. Other these new DAWS are more in the social layer,

more in the meat space layer, more on Discord. So what's the bull case for DAWS and how does it relate to the bull case for Ethereum and Ether? DC, let's start with you. So overall, I think DAWS represent a really exciting frontier in Ethereum and in blockchains in general. I think we're still in the very early innings of this, and so we're going to try and fail with a lot of things. I think some of the bull case from my perspective is Ethereum, Defi, NFTs, these are all things that are truly global. So giving people a decentralized framework enforced by code where it's appropriate is going

to create new forms of cooperation that aren't possible, whether that's a shared treasury or something else. We've already seen this with some of these NFT DAOs where people are coming together to buy these NFTs, spending millions of dollars in some cases. Shout out, Pleaser Dow. Yeah, Pleaser Dow is a great example of that. I do think that there are some headwinds for DAWS as well

because I think it's important that Dow's set clear purposes for what they're really trying to achieve. And I think some of the recent Dow's that I've seen spin up don't really set that purpose from the outset. They will galvanize around a given NFT or something. something that they're buying and then they come up with the purpose afterwards. That can be okay, too, but I do think it needs to happen somewhat quickly. I think also DAOs should really set clear entry and exit processes early on, especially if liquidity, big sums of money are involved, because

those are types of things that I would like to see so that we avoid bad behavior and so on. And third, I think ongoing coordination challenges are definitely going to be a challenge for DOWs that aren't ready to address those directly. I think we're going to see a lot of successful corporate management structures, frankly, mirror themselves in the Dow form, whether that's like hiring coordinators that are keeping the trains running on time and so on. I think that those things are important. So I think that DAOs are really immature in terms of where they're going to be within five years. Cyrus, I'm curious your perspective on DAO's. You know, you having worked for one, in fact, and I kind of think of Dow's as almost like a internet native programmable LLC or

C-Corp. Right. So like all the structure. needs to be put in them. But if someone were to ask me, are Dow's the future, right? And like, well, we just created the Internet Native Sea Corp. Like, of course they will be. We're still trying to figure out how to run these things and operate them. But, like, this is a new way of organizing capital in the digital era. What's your take on Dow's? Maybe not in their current form as kind of these prototype Dow's, but like in their final form, what do you think about these structures? Yeah. And I think it's important to highlight that like the current form is maybe not the best representation.

Because I think just looking around the ecosystem, you can see just kind of dozens of wildly different structured DAOs. And I think it's clear that there's still a lot of experimentation going on and what the proper structure is, both from a smart contract and a legal perspective. But, you know, I think like DAOs are like such a typical Ethereum type of idea where, you know, just kind of this pie in the sky thing that can do unimaginable things and, you know, gets ridiculed for years and you have a bunch of blowups and failures. I think we've all seen countless DAOs and DAO structures fail.

And there's just something about the grittiness of the community where they're just like really determined to make this work and see it happen. And they just kind of keep going back to the drawing board. And now we're starting to see the beginnings of successful DAOs, groups of kind of community members who obviously don't necessarily know each other, starting to achieve interesting things. And I think it's actually becoming pretty scary as kind of as a thought experiment of where this can lead to. I'm a little bit scared by what incentivized, collaborative, pseudonymous communities can create. But it's, you know, from a capital coordination perspective, it's obviously incredible.

Like, holy shit, we're just seeing organizations allocate hundreds of millions of dollars around to various, various endeavors. And this is kind of just the beginning. So it's only starting to grow. Like what happens when they start, you know, playing around with billions or tons of billions of dollars? You know, I'm not really like visionary enough to know

that future world will look like. But I can see the kind of the J curve or the hockey stick growth. Like it's starting to get going. And I think it's going to just blow our minds in ways that, you know, Dows are one of the hardest things to predict what it will look like in a few years from now.

it's like fairly easy to see how the defy space will evolve because there's a lot of traditional finance counterparts to kind of emulate our model after. But we're not talking about taking companies that are, you know, typically, you know, based on a particular country or nationalistic or physical brick and mortar and now are creating like global digital organizations. And I mean, I don't know. I think that's just absolutely wild and scary. Anthony, what's your thoughts on Dau's and how it relates to Ethereum and Ether? Yeah, so I pretty much agree with everything D.C. and Cyrus said here. I think the long-term view that I have on Dows is that they're going to be the best ways that

humanity has to coordinate both socially and with capital as well. And we've already seen pockets of this play out, like Pleaser Dow was mentioned. I think, you know, people came together within 24 hours, pulled capital and basically created this Dow to bid on People Pleaser's artwork for Uniswop. have taken that further and basically bidding and acquiring lots of different like NFTs within the ecosystem. So I think that just that as like a small example, we'll be looked back on as something that was like, you know, part of like Ethereum's history and the history of Dow is when we look back in like 10 years or something like that as something that kick started this whole thing. But yeah,

I mean, there's been plenty of Dow experiments in the past. Maker Dow is probably the earliest and biggest kind of tower to this day. Obviously, we had V Dow in 2016 that blew up completely. completely. It didn't really work out in the end. But I think, you know, as someone was saying before, like these experiments are just going to, you know, keep playing out over time. It's not like we're going to stop doing this stuff just because we had one blob or two blobs or whatever. But I think that people are getting smarter with it now. The on-chain DOWs, as you mentioned, David, things like Uniswap and like R-VAN stuff like that. The grants programs as well coming out of these things are really cool, where the DAWs are basically allocating capital to different builders within the ecosystem to build different things, whether that's as a developer or to do marketing or BD or whatever. And then on top of that, yeah, we have like the pleaser dows of the world. And as Zaris was saying, it is, it does get a little bit scary when you think about what can be achieved when you have basically people that are anonymous or pseudonymous where they can basically do anything they want with these kind of like tokens or this money that we have because there's no KIC or AML. There's no regulations. There's no way to stop people from doing what they want with

their money. And that's a double-edgedged sword because it means that, you know, the good people can do whatever they want, but the bad people can as well. So will we see like ransomware dows, for example, where, you know, the more kind of like ransom you get, the more value this Dow gets and the more value of the token backing this Dow gets. So, and that would incentivize people to keep kind of like doing ransomware things, because we've seen this a lot in the news lately, but I think that that would incentivize people that are holding the token to basically start generating revenue for the Dow by hitting more people with more companies and more people with ransoms, like ransomware software, for example. So I think that that is the dark side. But at the end of the,

day, you know, this is just what happens with every technology that is a neutral kind of technology. Like the internet is the reason why ransomware can kind of like exist and in such a big way. It's not like people were saying, oh, it's Bitcoin's fault because crypto makes it a lot easier. It's like, well, but it was already happening before crypto. Maybe crypto makes it easier for people, like bad people to coordinate capital, but it's already been happening for thousands of years. And it still happens to this day in a very big way. And even banks have being caught, basically holding money for criminals and getting involved in this sort of stuff. So at the end of the day, these tools will just be used for different purposes.

And I think that they're good that DAUs are going to bring to the world and bring to Ethereum and Ethan all that vastly outweighs the bad when it comes to this sort of technology. So, yeah, I'm very optimistic on the future of Dows. I'm excited to see how it evolves over time. I'm excited to see which ones blow up and which ones go on to become the new companies, essentially, that we see of the world. One thing I've noticed that makes me particularly bullish on Ethereum, the ecosystem, is that every Dow that I see, almost every Dow, tends to denominate and hold value in ETH. The first NFT sale that Bankless Dow did and generated a revenue of 0.85Eth.

And the Discord just absolutely blew up because of how stoked they were to get 0.85Eth on the balance sheet. And I mean, if we look at like the OG Dow, actually not the Dow, but the first Dow that started DFI, which I consider, that are Maker Dow. MakerDAO is all about putting ETH inside of Maker. And Uniswap is all about a Dow that puts ETH inside of LPs. And, you know, Pleaser Dow, it's all about putting really awesome NFTs in the Pleaser Dow Dow, but it uses ETH to do it. So when Ryan talks about how bullish and exciting it is that, you know, a Dow is just an internet native C-Corp. Well, the difference is this internet native C-corp denominates an ether, not in U.S.D. And like every single Dow either be on-chain or off-chain is inherently considering part of the ETH is money cohort. And that's what

gets me excited for better or for worse, just like you were saying, perhaps there's evil DOWs out there, perhaps, and hopefully there's a lot of good Dows out there. But they're all going to be on Ethereum and they're all going to be using ETH as their treasury asset. And so if there is a be bajillion LLCs out there, there's going to be even more DAWs out there. And all of those dows are going to use ETH as money. And that's kind of what gets me really excited on that. Anyone want to riff on that? David, I just want to say that was super bullish, man. I can see you're trying hard not to get kicked off of this panel.

We don't kick me off. I'll speak to that point for a sec as well. I totally agree. I think that, you know, we do have stable coins in this ecosystem, but long term, I don't think that the long term unit of account should be tied to the US dollar. Like, we obviously need something stable, but it shouldn't be tied to any one nation's currency because at the end of the day, Ethereum is its own nation.

if you think about it like that, it is its own economy, it can be completely detached and live on its own without any kind of like government or nation state giving it legitimacy or giving it a right to exist. It has the right to exist anywhere in the world at any point in time and on anyone's computer, anyone can run a full node. So we shouldn't be tying ourselves to any sort of individual nation state or any sort of currency that exists in the traditional world.

So I know USD stable coins are popular today. They're probably going to be popular into the future. But I think that my ultimate vision for that sort of stuff is for, you know, not only ETH, but something backed by ETH that is stable and pegged to itself, something like Rye, they're really interesting experiments because it means that we can get off our kind of like reliance on USD for stability and we can kind of like potentially make it so that we can hold ETH as our money, but also hold a stable Eath. Like I know you, David, you used to meme die as stable ether.

And, you know, it was under single collateral diet. But now with multi-clateral diet, there is centralization concerns because it is backed by other assets other than ETH. So from that perspective, we need something new, I believe. And Dye still inherits the same problem where it is pegged to the US dollar. It is still inheriting the US dollar's problems and it's still tied to that. So from that perspective, and it still has its own issues, of course. Like nothing's perfect. But from that perspective, I'm glad that all these things denominated Eith.

But unless, like, ETH is not going to stabilize anytime soon. So unless we can come up with a way to create something that is truly stable ETH, that he's just pegged to itself and works and is actually battle tested. You know, Rye is an experiment right now. I don't believe it has been battle tested or anything like that. But once we get to that point, I think that's when, you know, all these DOWs and stuff become completely unstoppable because they can just denominate in ETH while not having to essentially take on that volatility risk, which can actually kill DOWs.

I mean, if you look at the Ethereum Foundation, for example, during the bear market, like, the Ethereum Foundation isn't a Dow, but they hold money in ETH. Like, they hold a lot of money in ETH. Today it's worth, you know, it was worth a billion dollars at the top. It's probably worth less than that now. But, you know, they cashed out some to fear it because they had to protect against downside. So they sold some end of 2017. They recently sold some at the highs, you know, I think like $4,000 or something. So can we get to a world where these kind of like Dow's and these foundations can denominate an ETH and don't have to risk off ETH into USD. They can risk off into something else that's stable and ideally backed by ETH. So. So I'm interested, most interested to see that play out. And I think DOWS can play a big part there because they're motivated to see these kind of things happen. By the way, what about the EF's ability to call the top, huh?

Yeah. That was Metallic, right? That was Vitalik, I think. Yeah, I mean, I don't know how much involvement Vitalik has over there managing their treasury, but I would think that Vitalik has a pretty good pulse on the local tops and everything these days because he's been around for so long. And he also doesn't have much of a bag by, He's already like ultra rich.

He doesn't give his shit about money either. So I think for him, he's very grounded and very clear when he sees like the mania. He's like, yeah, let's just sell it because this is prudent rather than us moon boys who are like, oh, this is fine. He's just short stuff. You never sell. So since we're talking about markets,

I think it's time to come full circle in this conversation to come back to markets and predictions. But first, before we get to predictions, just a few weeks ago, Eith was marching up past 4,000. $1,000. It was crushing BTC on the ratio. Institutions were loudly signaling their intention to get ETH on the balance sheet. And the flippening talk was absolutely deafening. What's happened? Like, where did we go wrong? Like, why haven't we, why haven't we done the flippinging yet? Where are we in the market cycle right now?

And what's been like, what's been the postmortem on the very loud April and May to a more subdued June? Where do you guys think we are in this phase of the market? Anthony, let's start with you. Was Eric Connor right? Is the question? Don't say it. No, I mean, no, technically he wasn't because he called the top at 2,500. We went to 4,400.

So screw you, Eric. Like, I still love you, but you weren't right. Okay. But, okay, let's look at this in hindsight now because, you know, hindsight's always beautiful. Yeah, take off the ballmarked goggles. Yeah, exactly. What happened was that we had doge coin happen.

We had a extremely retail-fueled mania in May, late April, where all these people came into this ecosystem and they were speculating on things like Come Rocket. Yes, for people who haven't heard about that, that is an actual token that has a market cap of hundreds of millions of dollars. They were speculating on Safe Moon. They were doing the dog tokens. They were playing in the BSC casino. They were getting rugged in the BSC casino.

And there were just scams absolutely everywhere. I think the best indicator ever, ever for local tops or for market cycle tops is how many scams exist at any point in time. Right now, the scams are there, but they're not really there, right? No one's getting like rugged every single day and losing like, you know, billions of dollars. But they were last month and they were, you know, maybe towards late April as well. Now, the people who are playing in these things, whether it's a rug, whether it's a speculative token, you know, a lot of them will take profits into ETH or BTC, for example. But the thing is, I think that during that time, people were taking profits into ETH because BTC was weak.

It was going sideways. It wasn't breaking new all-time highs. It was crab season in itself, like as we like to call it these days. So people were going into ETH because there was a lot of hype around ETH and 1-559 specifically, and people were denominating in ETH, you know, if they were speculating on tokens on Ethereum, they were going into ETH. And I remember seeing that every time Dogecoin pumped, the profits would flow back to ETH after it was done pumping.

So there was that aspect to it. But the thing is the money runs out eventually. There's not unlimited money out there. I know the Fed is printing a lot of US dollars, but it's not like that's immediately going to go into circulation and immediately go into like Eath, right, or whatever. That's going to take time to kind of play out. People are going to take profits into USD still. Like, USD, even if it's inflationary at like 10%, it's still better than something like

ETH. Yes, you're losing 10% of your value in a year. But with ETH, you can lose 50% of your value in a week, which is what we saw happen when it went at local topped there. So I think that people just vastly underestimated how much money was being kind of like used on, you know, BSC and within these scams and how much money was being lost and taken out of the ecosystem. Because at the end of the day, the scammers aren't denominating in ETH and BTC. A lot of them are denominating in dollars. And they're just trying to get dollars out and they're just going to take it to dollars, whether that be stable coins or whatever,

is another kind of thing there. So enough people got wrecked and the new money stopped coming in, the fresh money stopped coming in. And we had a blog. off top. And of course, we had the concerns like Elon Musk, you know, turning barriers because of the ESG stuff. We had the China bands, you know, Bitcoin mining fud, whatever. I think, you know, that's just being fooled by randomness again. I think generally it just all happens at the same time where the market just had to cool down. Now, did I expect ETH to go from 4,400 to 1700 in like a week or a week and a half? No, of course not. That's absolutely insane. That is the biggest drop I think ETH has ever had in like a week and a half, I believe. And same with Bitcoin. It's one of the biggest

drops in Bitcoin's history. If you, if you discount, you know, 20, the early days or early years of Bitcoin, like 2013 or prior, then that is probably, I think, the biggest drop Bitcoin has had in the shortest amount of time. So from that perspective, I think that I still stick to my thesis that we're going to have these shorter bull and bear kind of like cycles where we go crazy, then we come down crazily, we go crazy again, and we just keep like doing that, you know, for years to come. But yeah, that's my general view on it. I don't, like, generally I think ETH BTC was going up because of things like 1559 because of defy getting a lot of activity, people realizing and the narrative changing. And ETHBTC has actually held on incredibly well during this downturn. Like typically

we see everything getting crushed if there's a real kind of bear market and BTC is the only thing that survives. But I think people actually have a reason to hold ETH this time for the longer term. And I don't think anyone actually believes that we're going into another two year bear market. I think people just like, we have to come down, we have to cool off a beer. People want to take profits and we have to just wait until, you know, more people come into the ecosystem again. And we're not like where we are today, which is, I think most people left. You know, the speculators left. They'll be back.

But it'll take some time to repair the damage. Cyrus, I've always enjoyed your takes on the market commentary. They always seem relatively sober in a very, you know, tentatively tipsy or drunk industry. Cyrus, what's your take on the markets right now? Yeah. I mean, I think what Anthony said was well said. He hit upon a lot of the right notes. You know, these days, I think with the benefit of kind of being in this industry for

a few years, you stop trying to explain every drawdown. Even the major drawdowns, you start, you know, it's 40, 50 percent. Like, why did it happen trying to point to, you know, Elon Mosca regulation or whatever? I think you just slowly grow out of that behavior and you kind of just start putting on your very, very long-term goggles on. You know, like the previous you think of those charts of Bitcoin or Ethereum over the very long term. And like the previous cycles bubble and bursts, it just looks so inconsequential, right? Like the 2013 bubble for Bitcoin, like you can barely even spot it on a chart. You know, I think with the radical new industry like this, I think you have to accept that it takes

a little bit of time to build the right market conditions, the right environment, you know, get all the capital flowing in at the right time. It's just natural that it's going to run out of gas from time to time, and it's just going to kind of cool off for a little bit. For me, kind of the whole, the purpose of this podcast of this panel is to just, you know, is to kind of keep conscious of what are these long-term macro trends for Ethereum. Certainly some of these, you know, very short-term events such as the IP-1559 and the merge. But even those, they're like so fundamental to what is the long-term vision. of Ethereum and focusing on those long-term fundamentals. I guess just the short-term trading aspect is just kind of stop mattering as much, right?

Like 4,400, 2,400, you know, we all know what the final goal is. We all know where, you know, what the potential is, you know, start adding up the TAMs for all the different use cases for Ethereum. You know, you've got the institutional ethos money adoption. You have everything going on with defy. Now you have like kind of social and cultural uses coming in with NFTs. you have a capital allocation through Dow's. I mean, we hit upon a lot of points on this podcast.

And when you sum it all together, it's clear that all these things don't happen at the same time in like one week or one month. It's sprinkled across many years. There's a lot of blood, sweat, and tears that goes into developing these products. And if I were to focus on one thing, it would kind of be the compounding growth effects of all of these various fundamentals. and, you know, try to remind myself that there's a tremendous foundation being built in the Ethereum ecosystem. And if you just kind of follow those fundamentals, then you just have to, you know, it's just like, how can you argue against the idea that these fundamentals will eventually manifest themselves in the price eventually?

It could happen next week. It could happen next year. It doesn't matter. but once they start to take root and grow, it's almost like, in hindsight, it was inevitable, right? Spoken like a long-term permable, Cyrus. D.C., how about you? And I just want to make the point that, like,

all of those Tam use cases come true that you just said, Cyrus, man, 10K-Eath, that seems cheap. Bear it. One trillion, you know, total addressable market size. And that seems very low. But, D.C., let's move to you for the, this question, market cooldown? Was Eric Connor right? Is this a multi-year stall? Or we're going to be

back online soon in a few months? What's happening here? So my general take on what happened in where we are is, and I'll preface this by saying there's a certain cyclicality in these markets, both against, you know, ether against USD, but also ether against Bitcoin. And I think what we've seen historically with every ball market is ether tends to outperform during, clearly bullish periods in the crypto market because it represents more of this risk on bet exposure to a lot of other parts of crypto, whereas during bearish periods, Bitcoin tends to outperform a little bit, although the dollar tends to outperform Bitcoin. So that's just how the market works. Overall, I think this market got ahead of itself in a lot of ways.

And I think that's evidenced even by my price prediction earlier. I really did not think we would see a $4,000 ether by May when I made that prediction six months ago. That was astounding. Similarly, I did not think we'd necessarily see a $60,000 Bitcoin by April. Actually, I think we saw it by March, March or April. So that is very significant. I think what was also interesting around this rally is that there were very few pullbacks. Pullbacks are necessary in a sense like this because they help to consolidate. People naturally enter and exit positions, but it gives people the opportunity to take profits.

And what you saw with Bitcoin, we'll just use that as the exemplar here. There was only like 1 30% pullback on the way up to 60K. And then we saw the big like 50% sell off. That is highly unusual compared to some of the previous cycles. So I think at the end of the day, we've got to have ourselves. There's a lot of reasons why that might have happened. I will pin it down to the market was extremely faothy.

I think a lot of speculative markets were accelerated by the COVID period where everyone's sitting at home. Some people had stimulus checks that they were investing into the market. You know, I won't go too far down that path, but I feel like that was kind of a unique moment. And now the world is coming out of that torpor and we're kind of getting back to normal life. And so where do I think we are now? I generally suspect we're probably in like a six to twerper.

month more bearish or sideways period. And I could be totally off on that length, but that's just my kind of gut feeling. And we might not set an all-time high during that time period, but the development work is going to continue. The adoption is going to continue. And fundamentals are going to keep strengthening across the board. So I really view this as an exciting opportunity, you know, similar to how December was a great opportunity. I think this is a great opportunity for people listening to this podcast to pay attention to what's going on Ethereum and Crypto. And, you know, my advice to anyone who's deploying significant amounts of new capital is it's better to dollar cost average in just because the volatility is so crazy, you don't know what's going to happen. So it's best to prepare

yourself to a range of different cases in the near term. But long term, I'm just as bullish as Cyrus and Anthony are on where we're headed over a multi-year time frame. Yeah, and I think all the bulls on this panel are long-term bullish on each well-past 10K price of Eath. It's just the timeline that is the question. Now is the time, the end of this podcast, panel's been fantastic. Thank you, Heath Bulls, for a fantastic panel here. Now is the time for price predictions. I hope you have them ready. So last time we talked in terms of cycles, we felt like in December 2020 that we were headed into the next bull cycle. It's kind of the way we phrased it. It's hard to know whether it makes sense to talk in cycles anymore. I know some of us here probably believe in this kind of like

more elongated super cycles, as Anthony and D.C. have kind of articulated it. But let's stay with the nomenclature of cycles here, just to keep things consistent. What is your price prediction now? We'll start with D.C. at the end of this cycle, whether that cycle kind of ends in, you know, nine months or 18 months or two years before we have a major drawdown event. DC, what do you think? You hold with your prediction? You can adjust it. I'm going to adjust it based on the speed with which we hit 4K because that was truly astounding. I knew that would be a critical level and that's probably why you corrected off of it.

So I'm going to change it to say through the end of this cycle, we'll probably see a 10K to 30K ether. And I know those numbers are big, but there can be real speculative mania in this market and it can exceed what we've seen already. and it can border on true euphoria. And I think over five years, just to give you a sense of how bullish I am long term, I think we can see 100K Ether over five years. If Ether is widely used as a programmable store of value collateral asset,

which is what I think it's long-term destiny is. So long-term, I'm super bullish midterm. I'm just writing out this chop, and I'm not going to worry too much about what the price does tomorrow. I'm more interested in what it does a couple of years from now. Wow, some pretty big numbers. Cyrus, what do you think? Give your predictions, my friend.

I'm going to, this is maybe a taboo, but I'm going to abstain from a price prediction. I've never done price prediction in all my years in the Ethereum ecosystem. To me, that implies, like, you know, if you think it's the top, should you be selling, you know, how much should you be selling, when should you be sizing down? Similarly, when should you be buying back in and kind of rebind the dip? I guess kind of like the more Eric, the bearish Eric mentality of trying to trade the back and forth. And for me, I think I'm in it for the long haul in the ride and see, you know, how parabolic this thing can go. I don't sell at the top of last cycle, which may have been kind of not the best trading decision.

And now a few years later we're kind of just like well past those numbers. I think part of being a trader in this space is knowing when not to trade, knowing that, kind of admitting that we have no idea how high this thing can go. It could go to $10,000, it could go to $100,000. It could go to wherever. I just don't know. I'm just in for the ride and see where this takes me. But zero clue what the price is going to be.

What do you think about this? A scale of 1 to 10, how bullish are you on the fundamentals of either of the asset? I mean, it's easy. I mean, at 10 for sure. I'm like, you know, I've never been more bullish. Yeah, it's probably obvious from even being here. Cyrus, this is a little longer term. So DC said five years from now, he wouldn't be surprised to see 100K plus ETH.

What do you think about that? There's so many things going on. There's so many kind of X factors both in the macro world and in the ecosystem. It could easily hit it. It could easily, you know, who knows. I've structured my involvement in the financial side of Ethereum so that like, don't have to worry about those price points in that way. I'm just kind of trying to take a more measured approach to my portfolio and just, again,

in for the ride. I think it's going up. Where it stops. No clue. Don't care. Anthony, how about you? Same question. Price predictions.

Well, first of all, I think Eric Connor hacked Cyrus, Cyrus's brain or something to make him the resident bear here. No, no, but I actually respect Cyrus's approach here. I obviously haven't been shy with my price predictions and everything that I'm saying. Some people give me shit about it, but I never actually put a time frame on it. I really don't give a crap about the timeframes. I'm obviously in this for the long term. I have already kind of decided, I decided this a while ago that I'm here for life.

So if I live to be 80 years old, well, I still got another 50 years in me. So, you know, I take the multi-decade approach here. But in terms of like this cycle, I guess if you want to call it, price prediction, I mean, I agree with DC. We could see 10 to 30k or something like that. And I also agree with DC that within five years, a 100k ETH is definitely on the table. Five years is an eternity in crypto. It may seem like a short period of time in normal kind of like years. But in crypto, I mean, five years ago was 2016. That was an Eth at like 10 bucks, right? And that was BTC at what, like not even a thousand dollars or something like that. And you know, you've got to look at market caps and not just price of assets

and things like that. I get that. But at the end of the the fundamentals for Ethereum haven't changed at all during this downturn. Like, they've probably gotten even better because we just keep building. We keep discovering new ways to add value to Ethereum. You know, 1-559 is still getting shipped. The merge is still happening. Layer 2 is still happening. I mean, it's happening right before our eyes. Everything else is still growing. I know obviously yields come down when the market buy it, but yields are going to come down long term anyway as more capital enters this system. The yields being high as a function of two things. It's one, the market being hot, people wanting to borrow stable coins to

leverage long or whatever. And one is a consequence of two, which is that there's just not much capital in the system compared to the traditional system. So if we have trillions of dollars flowing into this system, even during a hot market, the yields aren't going to be that high because we're just going to have more capital to pull from, more stable capital. So I think that, regardless of that, the fundamentals are still stronger than ever and they get better by the day. And because of that, I mean, my long-term kind of like outlook for ETH and Ethereum is still incredibly bullish. I have been a permable for as long as I can remember, but I see zero reason to be bearish in the long term. Now, short term, of course, we can go sideways for months here.

That's just the way markets work because markets primarily work off human emotion and humans aren't always rational. Actually, most of the time, humans aren't very rational when it comes to investing and when it comes to these kind of like games we play with speculative manias. but like just generally as long as the building keeps happening, as long as the fundamentals keep getting stronger, then there is no reason to think that ETH is going to just like, you know, go back to, you know, $500 or whatever, whatever, you know, bearish predictions I've been seeing flying around out there. And we don't exactly have to wait long for this stuff either.

As we have gone through, 1-559 is still slated for, you know, end of July, early August now. And then the merge, hopefully in Q1, 2022. But even if for some reason the merge takes until the end of next year, I don't think that really affects much. Like, that's such a short amount of time. And then once it happens, people get over it. I mean, I remember people actually saying for a long time, it's like, oh, my God,

proof of steak took forever to come. We launched proof of steak. And now no one says that anymore. And like, no one really cares anymore. That was just the thing of the past now. And no one's even talking about the price anymore because when people were saying that the price of eat was like $200. Now the price of eat is still $2,400.

So from that point of view, I think, you know, long term, nothing's changed. The long term, you should be an ultra-ball. I mean, I'm still buying ETH every day, like literally every day with whatever I can, with whatever money I can get together from whatever yield filing profits. I'm buying it because if you're in it for the long term, then you shouldn't concern yourself with these short-term movements. Because as Cyrus said, you're going to look back on them in a couple of years and they're going to look like a blip on the chart compared to where we are.

So, yeah, I guess those are my general kind of thoughts on the market. So one comment to add on that, like, you know, in terms of price predictions, is like how many times have you guys set to yourselves over the past couple years that like, oh, when ETH gets to X price, I'm going to sell, you know, 10% or 20% or whatever, especially when, you know, we suffered through, you know, a couple of years of, of a range around in between like 100 and 300 through 2019 and 2020. I'm sure everybody said, okay, like when ETH gets back to all time high or when ETH gets to a thousand, I'm going to sell this much, right?

And then it comes and, you know, maybe you sell something. And then it's like, okay, now what? Well, like, now that you're here, it's like not only validation for all of the work and kind of the investment thesis that you had, but you know that the journey is not even done. Like, okay, what about everything else you thought was going to happen that still hasn't happened yet, right? We only maybe banged out like 20% of the things that I thought were going to happen and we're already here.

Like, what am I supposed to sell just because we hit this number when you know all these fundamentals are on the line? And, you know, I can see something similar playing out like, like, okay, Let's say it gets to 10K in like the next one to two years. But like you still know that there's all this other stuff coming. Because you know like Ethereum, the grand vision is not going to be complete in one or two years. So it's like who cares if it gets to 10K? Like that's not what.

This is. This is the thing, Cyrus. Yeah, this is the thing I say. It's like, so if you have your living expenses pay for, like when you sell your ETH, you have to buy something else. Right? And it's like if you're maximally bullish on it. ETH, what else you can buy? I mean, if you have what you need to live on, you just kind of go

full circle and you're like, okay, well, I sold Eith and that was a nice tax event, but I kind of want that Eith back, don't I? Exactly. And given that like, you know, the cardinal rule of crypto investing is don't invest more than you can afford to lose, then really nobody should be selling for any reason unless there's like a really good fundamental reason. for doing so right. But like arbitrary prices, like round numbers or whatever, I don't know. That's just all noise to me. Like, just doesn't mean anything. 10K is just a number. Guys, this has been a fan-tastic panel. And I've particularly enjoyed this price prediction conversation. I don't think we've ever had a price prediction conversation like this on the bankless show.

But now, for the climax of the episode, the question I've been trying to get to for this whole entire podcast, Anthony, why did you shave your beard, bro? So I said on Twitter that I shaved it to save the market and that Eath can resume up only now because I made the ultimate sacrifice. But in reality, I just wanted to try a new look if I'm being totally honest. I was staring at myself in the mirror before I was going to have a shower and I'm like, what would I look like without a beard and just the mow on? Like would I suit me? And I did it and I put the hat on to complete the look. And I'm like, you know what?

I think it's all right. And people seem to agree with it. I don't know. Like it's all subjective. But I think that, you know, it might be a look that stays around for a little while. I haven't decided yet. It's grown on me, so to speak. Well, you know if ether starts going up, you know, you got to keep it.

Like, that's what it is. Uh-huh, uh-huh. Yeah, and if people see me growing out of beard again, maybe they'll just use that as a cell signal. Because during the run-up, I was a cell signal every time I got too euphoric and I caused some big dumps if you look at the chart. Not that I really think that I caused them, but, you know, the narrative is more. powerful than the actual reality here. You're a cell signal because you won't do the dance, dude.

Yeah, yeah. I know, I get reminded about that all the time. I'm painfully aware that I still owe crypto Twitter a dance. Yeah, you do. We all know. Yep. Yep. Yeah.

Guys, this has been a really fun ETH panel. We have a lot of fun talking about price. But at the end of the day, these panelists are all long-term bullish ETH. And I really like the Zen way that Cyrus is thinking about this. And I think we all agree that this is kind of a long-term asset hold for all of us. We can't wait to see what is going to happen next with Ethereum. So thanks a lot, guys, for reminding us of why we are bullish, Eith. Really enjoyed this panel.

Thanks for having us. I really enjoy being on it. Thanks, David. Action items, guys, of course, if you want to get in a bullish mood, you could always listen to this episode again. But you could also listen to the first Eith Bull episode that we recorded in December of 2020. We will include that in the show notes. Also, while you're at it, why not take another listen to the Justin Drake trilogy, the Ultrasound Money trilogy, where he laid out the case what is going to happen to ether supply post-EIP 1559 and the merge. Of course, risk in

disclaimers, guys, ETH is a crypto asset. It is risky. We don't know whether it's going up or down on a given day, but we are bullish about its future. Of course, you could lose what you put in. We are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.