Bankless - Is Ethereum Back on Track? | Jon Charbonneau & @0xBreadguy

Episode Date: April 23, 2025

Jon Charbonneau and Bread join David Hoffman to unpack Ethereum’s pivotal moment—facing tough choices to re-focus on its Layer 1.They break down Ethereum’s shift back toward prioritizing L1 growth, the delicate dance between Layer 1 and Layer 2 strategies, and why Ethereum must reclaim DeFi as its core strength. The conversation also explores the nuanced dynamics between Ethereum’s cultural vision and technical roadmap, how Layer 2s fit into Ethereum’s evolving ecosystem, and what this strategic recalibration means for Ethereum's future in a competitive crypto landscape.Jon Charbonneau: https://x.com/jon_charb Bread: https://x.com/0xBreadguy ------📣 WALLET CONNECT | ONCHAIN UX ECOSYSTEMhttps://bankless.cc/WalletConnect ------BANKLESS SPONSOR TOOLS:🪙FRAX | SELF SUFFICIENT DeFihttps://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAINhttps://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORKhttps://bankless.cc/Mantle 🌐SELF | PROVE YOUR SELFhttps://bankless.cc/Self 🏦INFINEX | THE CRYPTO-EVERYTHING APPhttps://bankless.cc/Infinex ------TIMESTAMPS & RESOURCES0:00 Intro5:28 Jon & Bread’s reaction to the Dankrad/Angsar episodehttps://www.bankless.com/podcast/ethereums-strategic-pivot-ansgar-dankrad-mike-ippolito https://x.com/TrustlessState/status/1914402754891559253 https://x.com/TrustlessState/status/1914330497905299790 27:56 Unichain or Ethereum L1 is DeFi? https://x.com/TrustlessState/status/1913633500206428201 35:07 Making the L1 competitive while keeping L2s happy 44:38 L2s Parasitic? 48:49 Bitcoin Roadmap Bread vs. Jon57:09 Decline of the ETH price & all asset prices overpriced? 1:05:02 ETH/BTC growth slowdown reason 1:13:35 The politics side of the conversation 1:19:05 What Bread & Jon are excited about 1:26:49 Closing & Disclaimers------Not financial or tax advice. See our investment disclosures here:https://www.bankless.com/disclosures

Welcome to Bankless. Today on the podcast, I have ZeroX Bread and John Charbonne. Bread and John are both informal researchers, educators, and crypto, and both have been active commentators on the evolution of the Ethereum roadmap and the position that Ethereum finds itself downstream of the design choices that it's made. The recent episode that I did with Onscar and Dankrad has changed the conversation around Ethereum, as people are now imagining a different future for what Ethereum could be, one where the Ethereum Layer 1 has a renewed focus and attention from Ethereum leadership. Still a roll-up-centric roadmap, but all around a strong layer one.

Since Brett and John have been so active in this conversation over the years, I decided to get them on to have a discussion about their thoughts and what they think will happen next in Ethereum. Before we get into the episode, a message from our friends and sponsors over at Wallach Connect. While Connect has been used by over 255 million connections from 40 different million unique users all around the world, all who are simply connecting their wallet to the applications that they want to use. In order to decentralize and protocolize Wallet Connect, Wallet Connect is entering its final form. They recently introduced the last capstone building block

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We also talk politics and crypto too, because we're really just here to have a conversation about the topics that we are interested in. And we're going to do this next week, too. I had fun with Brett and John. And they said, they had fun too. So we're just going to run it back a week from now with one more guest who couldn't make it today. And we're just going to chat about the weekly meta. Whatever is in the meta, maybe it's content coins, maybe we've moved on to something new by then. Whatever floats our boat, you'll just have to wait and see. So if Bankless Nation, you liked this episode, do tell. If you're a bankless citizen and you're in the Bankless Discord, at me and tell me if you liked

it or if you didn't. Or if you're on Twitter, you can do the same. You can app me there too. I want to hear what you think. And with all of that out of the way, let's go ahead and get right into the episode with John and Bread, but first a message from some of these fantastic sponsors that make the show possible. Imagine verifying yourself without handing over personal data. No hacked databases, no unnecessary personal exposure for airdrops, and no AI bots ruining community governance. Meet Self, the on-chain identity verification protocol built for privacy and control. Self protocol uses zero knowledge proofs to confirm your identity safely. Users prove key details like age or citizenship without revealing sensitive personal information.

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First is their enhanced index fund, aiming for $1 billion in AUM by Q1. It provides optimized exposure to Bitcoin, E, Solana, and USC, complete with built-in yield opportunities. Next, Mantle Banking promises to revolutionize global value transfer through seamless blockchain-powered banking services, bridging crypto into your daily life. Finally, Mantle X blends AI with Defi to deliver an intelligent, user-friendly experience for everyone. And the best part is that this is all in addition to their already launched products like Mantle Network, ME, and FBTC. Ready to step into the future of finance, follow Mantle on X at Mantle underscore official and join the on-chain revolution today. Bankless Nation, I'm here with John Charbonneau and Zero X Bread Guy. Bread, we just

had you on the weekly roll-up coming back on for round two just a few days later. Good to have you back. yeah you couldn't quit me so here I am yeah John also it has been a while it's good to see you back on the podcast my man it's good to be back on yeah okay um so we just put out this episode uh that we titled ethereum's strategic pivot I think it's going around the ethereum community kind of making waves in the ethereum community haven't really seen it go outwards too far beyond that I think the ethereum community is still kind of digesting and processing it but it seems to have struck a pretty meaningful tone. People are taking this episode pretty seriously, this conversation very seriously. And I wanted to start by getting your guys's reactions and reflections on the episode.

John, you've been a commentator of Ethereum's malaise and what Ethereum needs to do. And so I think this is directly in that same arc of content that I think you helped inspire in the first place. So maybe I'll start with you, just what were your first thoughts and takeaways coming out of that episode? Yeah. I mean, my very TLDR is I thought it was great. I share a mix of kind of the same sentiments that Ansgar and Dunkard kind of had at the end of it, which was particularly Donker I was calling out of like, you know, I mean, the big next step from here is, you know, obviously a lot of this is like it's a lot of talk, it's a lot of vibe change, it's a lot of stuff like that. Like we need to ship actual things. And so that is obviously the big concrete open question is, you know, what is this going to lead to very concretely over the next, you know, six, 12, 18, 24 months. what is actually going to get shipped in reflection of this. But for what you can ask for now is, you know, what has changed in the last, you know, three, six months? And I think the vibe shipped have genuinely been great over that kind of period of time.

There has been a just very, very big shift of, you know, there is a full just acceptance of, all right, like, we have some problems here. We need to fix these problems. You know, what have we done wrong in the past? What can we do better in the future? You know, it's all those things, you know, having more product first mindset. You know, what are the areas very literally that we can improve technically in reflection of that, stuff like that? And then also kind of on the people side, like I do think the kind of leadership shake up. I mean, that's always a good way to restart things.

And from talking to people who are involved there and just from, you know, just having background contexts of like, you know, just knowing DeMosch previously. And I was super excited about those changes. And when you talk to the people in the F, you know, people like on Skada and on crowd, like you can you can definitely feel that it is, it is different now, how things are working now versus, you know, a few months ago before he showed up. So everything is like definitely turning in the right direction is. is my honest feedback at this point, which is great to say. Would you say you share the same Rosen Thorn that was pointed out at the end there by Dunkrod? Like the Rose was like, feels great, like acknowledgement of the problem stepping forward, but still like, yeah, well, you haven't done anything, right? Still got to deliver.

Would you say you're in that same camp? Yeah, very much the same thing. Which is, you know, I mean, in an absolute sense, like, that is obviously the more important thing is that nothing concretely. has actually like really changed or shipped or whatever in reflection of this. But with an understanding of, you know, I mean, like the stuff I was talking about was maybe five, six months ago, something like that at this point. And there's only so much you could change in Ethereum, like in that period of time. I think the best that you could ask for over the course of, you know, a few months is something

like this of like there is a meaningful vibe change across, you know, all like people all across the Ethereum community and particularly at the top. And I mean, very literally leadership organizational changes at the EF, you know, what are people prioritizing? It's prioritizing, you know, thinking about these are things we can. can do an L1 scaling in the next six, 12 months, stuff like that, which is, so there is a lot to do. I mean, this is a small percent, a very, very, very small, like, single digit percent of the things that actually need to change in the long term.

But realizing that, I mean, that's the best you can hope for in this, like, pretty short period of time. Brad, what was your takeaway? Honestly, the same, except, so my general view, I've been calling for a skill of L1 for a long time, about as long as John, but somehow I've been able to straddle this line of not being pointed and laughed at by the Ethereum Inner Circle, I guess is probably the best way to say it. It's like, Donkrad at the end of that was very, very pointed and like, you know, he's always at the position of scale of the L1.

Blockspace is not fungible, state is valuable, all this stuff. I share that same opinion. I genuinely think that, like, people have overindexed on just how abstracted a lot of this stuff can actually be and, like, to actually drive value back to your asset, which is like what everyone wants out of this stuff, right? Yeah, we're talking about technological handling of a lot of this load and latent demand and global block space, you know, appetite. But like in the end, people will say, like, you want to have the demand pickup, but also the correlation of token price needs to come with it or else no one's going to be happy, right? So it's, I think prioritizing that stuff and driving value back to Ethereum has is going to come from prioritizing its own block space, prioritizing its own state.

And, yeah, Donkrod had alluded to that, but then said, like, he opened up the wind. window of saying, hey, I don't know what can happen. Maybe like the roll up centric roadmap is appropriate. It's, it's a, it can work out. But it's because he doesn't understand like what the potential outcome of that abstraction can be. And maybe it can actually get to a point where, you know, this stuff is semi-fungible. Like it is interoperable. You're interacting with multiple chains, but it feels like one. Like maybe that is a future state. I'm more skeptical of that. But, uh, yeah, I've been able to do it without being hit with the scarlet letter. Yeah. I do agree that.

the general summary of the episode and the Ethereum community's comprehension of the issue over the last six to nine months has focused on this idea that prioritizing the layer one is the missing piece that has been missing for a while. And also that like the Ethereum culture is like concerned with a sphere has a too large of a sphere of concern as in like the sphere of concern for. Ethereum is, you know, roll-ups, layer twos, anything that touches Ethereum is Ethereum. And that has come at the cost of attention and focus and prioritization of the layer one. And so, like, you know, this has some level of like Bitcoiner mindset about it where, you know, you preserve the value of BTC at all costs. You preserve, you have your first loki of concern at the innermost core of the system. And as things get further away from the core of the system, you have a smaller amount.

of concern for that. And Ethereum, maybe the malaise of Ethereum is that its loki of concern was so large. Any layer two that settles to Ethereum is Ethereum. And that's come at the cost of the layer one. I think slowly people are repositioning themselves to think like, okay, the layer one actually might be the might ought to be the epicenter of the Loki of concern for the Ethereum community and Ethereum culture. And that might be the logical place to focus our energies in order to have a sustainable ecosystem. Brad would reflect on that for me. Do you think BTC's concern is actually the price or is it the values of like, you know, having a cap money supply defending against, like I think, yeah, asset appreciation is a byproduct of that. But do you think that is the number one thing that they are optimizing for whenever they say like, you know, don't change the code.

Don't push to L2s, don't whatever. I think Bitcoin is optimizing for the 21 million hard cap. And what I mean by that by comparison Bitcoin to Ethereum is like Bitcoiners and Bitcoin. is concerned with Bitcoin primarily. And that has not, that's not equally true with the Ethereum community. Ethereum community is like concerned about like this large, like nebulous cloud of second layers that, you know, settle to Ethereum, which can be some combination of aligned and misaligned with the interests of the layer one.

Yeah. And you're starting to draw lines around that, right? Like you're, you put out that image that has the concentric circles of like how Ethereum, quote unquote, you actually are within the ecosystem. I don't know if you got any like specific feedback from that. Just like putting that out in the world and hearing people talk. What was the what was the vibes you got back from the world? It was mixed.

Yeah. So I've put out a couple images that are going into this article that I'm working on. And like, you know, when you put out, I'm putting out feelers on Twitter, right? Like how does the how does people respond to this? And the first image I put out, everyone responded to very, very well. And that first image was just like a circle of layer two is optimism, world coin, abstract, a circle of layer two is around the layer one, around the, Ethereum circle. And in the first panel, in the first image, the Ethereum circle was very small. And then

then there was an arrow to the same exact image, you know, same layer two is around the Ethereum center. But in the second image, the Ethereum center was very large. The Ethereum circle was very large. And I said, like, this is what the Ethereum community wants. And I think everyone responded extremely positively to that image, the implication of we just, the Ethereum holders, ETH holders, just want a larger, more powerful layer one. That's what, that's what ETH holders want. And so, like universal acceptance of that, even, especially from layer two's. Layer two's commented on saying, like, yeah, we want this. Like Alice Glukowski said that. The second image, the image that you're referring to, bread, where I had like this first circle, which was ether and the Ethereum

layer one, the next circle out was based and native roll-ups. And then the next circle out from that was based or native roll-ups. And then the next circle out was just roll-ups. And then the next circle out from that was layer two's. And I put out this image that I put out the spectrums like, well, if you are the Ethereum layer one, you are Ethereum. And as you get away from this concentric circles, you are becoming less Ethereum. You are imbuing less properties of Ethereum into your roll-up. And that was very mixed. The reactions that was very mixed. I think you responded positively to it, but other leaders of other layer twos came into my DMs and told me that they felt hurt by this because they, and it was a little bit of a little bit of a

a misalignment of what I was trying to say. But people are thinking like, okay, Ethereum is like the United States of Ethereum. And saying that layer twos are not Ethereum is saying like California is not the United States. And it's this like very squishy semantic political idea of what it means to say layer twos are Ethereum because people want this thing, this idea of Ethereum to be Ethereum where other people are interpreting it. I think people with something like John's disposition,

are saying like, no, the Ethereum layer one is Ethereum, and other layer twos are different chains that settled to Ethereum. But people like John and I think people like you, Brett, have this preference for technical objectivity. And other people in Ethereum have this preference for this big, grand Ethereum vision, this idea of like the Ethereum ecosystem, the Ethereum network state, the Ethereum system. And there's a, these clash, these clash. And they're hard to, they're hard to contend with. I'll pause there. I'm not surprised, but I do find it funny how people are more universally positive on that first tweet and then more people have problems on the second tweet. When necessarily you shouldn't be able to be positive on the first one and then have a problem with the second one.

Because if all of these are Ethereum, then it shouldn't matter which circle is bigger or smaller. Like, oh, these are the same thing. Like, this is one circle. Like, why do you care? It doesn't make a difference. But it's a different, like, no one's going to say, oh, yeah, no, no, like we want the Ethereum layer one to like. like be really small and like go away, or at least less people say that because it's seen as like more openly, I think confrontational and competitive to the layer one. And like that's where you get like a dicey line as a layer two of being like, go away. No, we want all the users. You don't want to say that quite explicitly. Versus the other part, I'm not surprised that in a Merrill 2 founders didn't like the getting rid of the basis of Ethereum, Arbitram as Ethereum, Optivism, Ethereum. Because I think very obviously that has been to the benefit of all of these layer 2s over the past couple of years. They get to kind of piggyback off of a lot. of that branding and alignment and association and just like being put in front and center as this like credible great thing like we like we are Ethereum.

Like that is obviously been very beneficial to them. And so I like I am not surprised that a number of L2s would not love that deep prioritization of that. But I mean this gets to you know like what are you just trying to solve for. And I think that a lot of people what people are trying to solve more and understand their problems now is like very literally. I mean like a lot of it centered around like what is ETH price doing. And if you do care about ETH doing well in the layer, then. you probably need to care about the layer one doing well. Because no one can dispute over the past year or whatever that like base is doing great.

Like they're not having any base has no problems right now. There's no malaise in the base community. Yeah. Yeah. Like they're having a great time with the role of centric roadmap so far. I mean, their problems will end up being like a technical like if they're bumping up against the gas. I mean like that they literally do need more of. But like there's no concern about value capture or anything like that from the coin base side.

those value capacity type concerns are at Ethereum level. And so, like, necessarily that means there's going to be a little bit of, you know, re-architecting or shifting back of like, okay, what do we need to prioritize and reflection of if we want to move some of the value capture here? You're going to care more about like, all right, we need to actually prioritize L1 scaling and all these things and not just kick all the users to the L2s. Like you guys figure out all the interrupt and like whatever. You need to just start providing more of those products yourself in house.

I think that's why that first image actually carried well. Because like if you, you're right, they're saying the same thing. and you only see price in one of those two images, right? You don't see price in the in the alignment image, right? You just see that like, oh, I'm no longer, I'm doing all this good work or I thought was good work. And now I'm starting to realize like all this thing that I did that I thought was right is maybe not as right as I was intending.

And like there's a lot of frustration with that. I totally get it. Like that's that is what it is. But in the first one, right, like the technical property, like that doesn't describe technical properties at all. There's no differentiation between those two, right? Ethereum is just as good at, you know, $1,200 as it is. for $2,000.

And that's kind of the problem, is that the price action hasn't really, doesn't really dictate, at least, you know, when we get extremes, yeah, sure, security is like,

becomes an issue, whatever. But it doesn't really change the properties that grants to these L2s purely based on price, which is kind of the value proposition issue. Right? It's like,

Ethereum being much more expensive at $2,000, $3,000, $5,000, $10,000, is not necessarily a better settlement layer than when it is at $2,000. And, yeah, People just want the dollar to go up or the price to go up. They don't necessarily care that the technical properties are that much better or that I can actually use it there.

And they just make the asset go up. And the interesting tweak that you could have made to that first picture, too, which would have gotten a different reaction. And I think actually would have touched that like a different but important point too is if so the image that you had was strictly positive sum. None of the layer two's shrunk in the second picture. If you proportionally shrank, shrank the layer twos in that second picture by the amount that Heath grew, then what would their reaction? have been like that that would be a good AB test um you know it's like actually as i was making that that picture i actually started making that second image actually by shrinking the layer two and i was like wait wait wait actually that might piss people off let me actually just increase the size of the layer

one let me just do that and so it's like all i'm doing is redrawing the size of circles but how you redraw them really really matters yeah yeah and that and that actually does kind of touch on the important point of, you know, whether you would like this or not is, what do you think the outcome actually is by, you know, doing a lot of, you know, juicing up the L1 scaling? Do you view this as pretty positive sum to the L2s? Or are you as in a two L2 viewing this as like just strictly competitive, you know, zero sum? We have users. They're taking more of the users. We have, you know, we're going to shrink. Depending on how you view that outcome like playing out actually does end up different. Because I think there's good arguments that is positive some, that's negative some, that it's zero

some that is positive sum of you know hey if you know this sends eth back to like 5k all the l2s are probably going to be doing real you know real well they're going to have more assets more users their tokens are probably going to go up to like i think that's a reasonable argument there is also a reasonable argument that all this stuff is small right now this is pretty zero sum like they're just going to take the users away and it might even be worse because now you're bringing them back to the worst ux area and they're really going to want to go somewhere else um so no no one honestly knows how exactly it will play out i think there are like different possible outcomes there But that actually does kind of touch on why people would be ignored or not, which is interesting.

Yeah. And okay, so I actually really like that line of reasoning. I think if the Ethereum Layer 1 does, you know, expand its capacity, I don't think that that would be felt equally across all layer 2s. For example, coining content on base, I do not think will change because the Ethereum layer 1 grows in capacity. And I think like whatever ultimately comes out on MegaEath, for example, a streaming blockchain, whatever apps fit on a streaming blockchain is not going to be really impacted by the layer one going from 17 to 70 transactions per second. But I think that there aren't going to be other layer twos, which do materially lose out because they haven't been able to differentiate themselves. They're kind of a commodity. Maybe they didn't really have a reason to exist in the first place.

And I think some layer two's that don't have strong, like, differentiation, which is what Onsgar was saying in the podcast, that, you know, it's kind of like the Fed raising interest rates. When the Ethereum raises the capacity of the layer one, the marginal L2 that we didn't really need doesn't, can't really justify its existence anymore, is a take. Yeah, I mean, not that they were needed anyways, right? We're seeing power law pretty heavily in the L2 world, right? So, like, yeah, 0.5% of transactions are existing on L2. but like if if the capacity of of Ethereum goes up right it's not mutually exclusive that it does not benefit the L2s right basis capacity goes up if the blobs are are gone up the interoperative interoperative is improved because you know now Arbitroman base can can settle faster because the finality is quicker on the L1 right so it's like they are materially improved if Ethereum improves right like Ethereum could be a better settlement layer and if then those those dominant chains that are already showing power law start to become. even better as dominant chains, right? Like, base has been at capacity and begging for increase in blob space for the last, you know, what, six months-ish, right?

So it gets this space back. It's been at capacity. And now that capacity goes higher, probably takes away from other L-2s even more than it already has been. I think that's just kind of like where we're seeing the market is gone. Yep. Yeah. And I think it's honestly positive to just set the bar a little bit higher of, you know, what is the minimum viable thing that you should be providing to just even be able to claim like, hey, is a reason why I'm shipping an L2.

I don't think that it should be a reasonable, like, sufficient answer of, oh, I'm shipping an L2 because it's a little bit faster and a little bit cheaper than the layer one, and we do the same thing. Like, the layer one should probably just do that. You should just have, like, a reasonable bar. And then there's a million things that, I mean, player twos can do to, like, uniquely differentiate, you know, whether that's, yeah, just like ultra low latency for certain types of specific applications or more of this consumer oriented stuff. That's just, like, a different level of throughput that, like, Ethereum's not getting to anytime soon.

Like, like, those kind of things where you can differing. shape more like make sense um but yeah if like all you need is like a pretty vanilla you know decent evan blockchain to just like do some normal stuff like you should probably just have a layer one that could do that um so you don't have a million people trying to go launch that elsewhere do you think we'll have an uprising of of ethereum cohort that is going to be like shun el2s as a category broadly like the return to greatness like hey like we don't agree with i've been i've been catching some shit on twitter of just like you're a scam many youth is a scam because like it's not It's not Ethereum main net, right?

I'm wondering if... Wow, really? Yeah, yeah. There's an Ethereum deep cultural list, like layer one maximalist. Yeah. So I'm wondering if that cohort is going to grow after seeing the last few years that, like, you know, what, going down this path, seeing how successful. Solana has been price action-wise, adoption-wise, that like maybe this is the right path. And, like, I still think they want to preserve their values.

I think that's always been the argument that, you know, for anyone who is calling for L1 scaling, just like, yeah, don't try to compete with Solana, but push yourselves to the love. levels that preserve your actual values, right? The decentralization, everything that's useful. I'm wondering if those people are going to, like, if that cohort is going to grow and the calls are going to get even louder and then, like, what happens in that future? I don't think it will get, I don't think it will ever get that meaningful,

just kind of almost definitionally, because if that is, I would classify as just basically the most kind of extreme L1 maxi view. And I think if you hold that view, you're just not an Ethereum person. You're missing the point of Ethereum, yeah. Yeah. Like you're at that point, you are just like, you are a hardcore like entirely Solana or Sweet or like whatever, insert your other single chain. It's kind of Bitcoiny. I mean, yeah, possibly even that.

But yeah, if you are just like super all that we care about is the L1 and you see absolutely zero value in any of these other chains that are like have varying levels of relationship to it, I think you're probably just like, you're probably just not in the Ethereum person. Like I'm like someone like me who I think falls in that more middle category where, you know, have been very positive. on Solana and Bitcoin and stuff like that over the past year, critical of a lot of Ethereum stuff. Like, I very much fall in that middle camp of like, this is a spectrum and there are degrees to which L2s are beneficial to the L1. It's, and like the value that they provide is definitely not zero. It is definitely not the same as it equivalently scaling the L1, but it's definitely not zero. And just like, you know, understanding what to prioritize is a reflection of that. I think that's where most people are now is kind of that middle view of, you know,

these things are all helpful to varying degrees. We just got to figure out, you know, where to put the meter. But I do see your point bred. I think culture and community that surrounds blockchains is always downstream of the technical properties that that blockchain has. And when the technical properties of Ethereum is trying to reweight the importance, elevate the importance of the layer one, I would expect it would follow that members, a certain sliver, a certain fragment of the Ethereum community would start to realign their messaging around like, oh, the layer one is the place to be. And the article that I'm writing isn't trying to advocate for like layer one maximalism, but it is trying to advocate that our messaging as the Ethereum community ought to reflect a higher reprioritization of the importance of the layer one and applications on the layer one.

And so I think part and parcel with that will come some flavor of like, you know, fringe Ethereum extreme people that are always about like no, Ethereum is the layer one is the only layer one. maybe not reject layer two's, but only talk about the layer one. Like, I could see that whatever fringe that there is there growing in weight because that's what the technicals of Ethereum are pointing towards. I think that they'll leave and go become economists at Onza, though. I think that's the more like that. I mean, okay, so what about this thought experiment? So, trying to create this narrative and testing out how the Ethereum community is feeling

about things. I saw a unichane tweet that tweeted out, Unichain is for defy. And I retweeted this tweet saying, the Ethereum Layer 1 is for Defi. Part of that motivation was coming from the idea that if the Ethereum Layer 1 is going to be for anything, it's going to be for Defi. Defy is the first and last thing that the Ethereum Layer 1 will optimize.

It will be good for. And we see Arbitrum also having this messaging. Arbitrum is for Defi. Unichain is for defy. and I am concerned that this branding that some of these layer twos have are coming at the cost of the layer one. And we as a community are allowing these layer twos to, you know, take what I think is Ethereum's golden goose, which is defy. And so I'm trying to, again, like elevate the importance of Ethereum layer one defy as the main cohort of applications that really make the Ethereum layer one strong. And I don't want, like, you know, it's permissionless to add a layer two to Ethereum.

and if it's permissionless to add a layer two to Ethereum, and then also to brand yourself as the home of Defi, that can be viewed as an attack on Ethereum. Or at least it's not optimal in terms of value creation for the Ethereum ecosystem is my claim. And so I've retweeted this week saying, no, not implying, I'm saying, no, the Ethereum layer one is for defy. And then, of course, I get into a fight with Hayden Adams,

who, you know, founder of Uniswap and Uniswap Labs, also sponsor of bankless. Thanks, Uniswap. But like, okay, so Hayden has done this fantastic job of building Uniswops V1, 2, 3, and 4, which are great applications. And I'm incredibly grateful that he has built these applications. And I would like to elevate this thought experiment of what if the Ethereum layer 1 was so strong that Uniswap didn't feel the need to make a whole entire chain,

but only in focus on the layer one application and the strength of that layer one application. If the layer one is so weak that it actually incentivizes our best application developers to become chain developers instead of app developers, that I'm worried that that comes at the cost of the value and sustainability of the layer one. And so I would like to entertain the idea of this alternative universe where Uniswap Labs is solely focused on Uniswap, the layer one application in the same way that Jupiter is focused on its Dex product on Solana. And I think it's worth considering a failure scenario where if all of our best app developers, the Ethereum Layer 1 app developers all turn into chains, chain infrastructure providers, that might just hollow out the layer one to a point where why would anyone care about the layer one in the first place? Brett, what's your take? It's not even that they'd be chains.

They go to be BD teams amongst all the chains to like, like Avae's on 75L2s, right? So like the man hours it takes to go and do that is probably. just as detrimental as going to do like a dedicated chain, right? Now, we're talking about power laws and like what the instate of L2s are and all this shit. But I, yeah, it's not, the time is not fungible, right? These people need to make their money and they need to spend their time somewhere. I do start to hear you ringing as the maximalism talk. We just came on the back of it of like, hey, you know what?

These L2s are starting to be kind of eh. But like, yeah, I think this is the thing that's kind of frustrated anyone watching the ecosystem broadly. You see this stuff and you see like, yeah, there's some countervailing incentives and doing this stuff and that does drive time, energy, value, like how much value we don't know from Mainnet. And is is Mainnet the best it can be when that is happening at scale across the entire ecosystem? So yeah, I agree with you.

I think that stuff should be for Defi. I don't know how you message that. I think you almost have to just accept this competitive. friendly competition mindset to say that, you know what? Like these things are very real, right? Like there is a little bit of overlap here. And I think it should be friendly in the sense that like Ethereum is now in the position to advocate for itself and say why D5 belongs there.

It's okay for Arbitrum and Uniswap and all these other guys to try to do, our uny chain to try to say that about themselves too. But I think it's important that everyone stands on the properties that they can grant because Ethereum has the number one property for a lot. of things and say this is why this kind of defy belongs here and yeah yeah if you hope the if you hope the pie of this entire industry is going to grow like net long term does not matter right everyone should be successful to a degree if you are dominating in your domain but that doesn't mean it's not going to be a little frictionful with some of these people that were perceived friends because you become

competition that's just natural yeah yeah you know i mean the uniswap municham one should also be a pretty, I'd say, like, unique, interesting tests going forward of, you know, how well is the L1 scaling stuff going and how much value do you get from these L2s? Because, I mean, very literally, they are the interesting hedged kind of, you know, we have a core L1 product and we're building this L2 thing. Like, if it is very clear that the product that they are delivering as an L2 is meaningfully differentiated to the point where the features that they are adding there that you can't have on the layer one give you a way better product, the users will go there. And like, you will just see that in the numbers over time.

And if you do not see that in the numbers and you see all of the volume staying on the layer one and the layer one's getting better and you could just provide a better product there, well, then that gets to the point of, okay, well, then we have kind of reset the bar. If you could just build a good product that the layer one and users are happy here. If you want to leave, like you need a kind of very good reason to go build this completely different unique thing. So that will definitely be a very interesting one to see over time. It's like where does that volume start shifting and how much better does the layer one get? Can that improve you in a swap on the L1, et cetera? Brad has spiked pretty heavily. Yeah, I'm looking up

Unichains TVL. They're up to $340 million, which is spiked pretty heavily on the 15th. I don't know what happened there. And if that was launch, but it was hovering at basically nothing for a while. And it just makes me go back to the question of like

if these chains are cultural hubs, like do you go to a chain by itself purely for the features or are you going to stay closer to the cultural hub of this stuff, maybe some unique state that exists on the L1, even if it is not feature complete with Uniswap there, but because you are one hop away instead of two hops away, are you willing to stay there and participate in UniV3 instead? And yeah, not have all the MEP protection, redistribution, all that stuff that UniChain has. Yeah. I'm glad that they are doing both. I really like that perspective, John, of like, oh, well,

Uniswap has a foot in both camps. They have a foot on, you know, layer one, layer. one volume and they also had their own chain. As an acid test, I think that's a very, it's an amazing, it's amazing that we have that example to even look at moving forward. I do think that this does kind of resemble the dance that the Ethereum leadership in the Ethereum community and like me as well with when I write this article and I think just broadly it's a limit test, that as Ethereum reprioritizes its layer one, how does it also retain this layer two, ethereum? ecosystem, this highly aligned layer two ecosystem because coming, like trying to grow the layer one does come at the cost of the growth of layer twos in a way. Like, maybe it's positive

some and that's the best case scenario. And I think that is the, that's the optimistic case. And it's the case that I want and I hope that is true. But we are doing, we are now doing this dance of how do we make our layer twos as customers, customers of the layer one? How do we make sure that they stay happy as we, you know, increase our own competitiveness? Like the, The broad problem with Ethereum is that it has not allowed its own layer one to be competitive. That is the pivot underfoot. We are trying to make the layer one competitive. And that includes being competitive with its own layer twos.

And so how does Ethereum walk that line between trying to make sure its current layer two customers are happy while also increasing its own competitiveness at the layer one? Yeah. So this kind of gets back at the, I've always hated the L2s or parasitic conversation. from you know who yeah you know who yeah Kyle's you know who yeah Kyle Jesus so and I I've always hated it because it's it's not a definitional thing of the construction it is a philosophical thing in my mind right like I can launch a layer two on

top of Solana and I'm not inherently parasitic if I am adding features if I am just like doing whatever it's I become parasitic whenever the focal point of the team building Solana people within the control of their domain stop prior prioritizing their own ecosystem, right, and start diverting resources to specifically help me and push users to me, right? Like, at that point, the argument becomes, yeah, I guess it is a little parasitic because things, you're, things inside of your control are pushing things, pushing users, pushing fees, pushing resources, whatever, to develop your chain towards another entity that is directly benefiting from that, right? Then you start getting in the conversation of

fees versus moneyness and the value of approval of that. I think that that gets fuzzy because one, it's not quantifiable, right? Moneyness is just this opaque thing that everyone kind of acknowledges but doesn't know how to quantify. And so I think it doesn't have to necessarily be like, oh, make sure we're serving these L2s, like directly thing. It's just like Ethereum should make the best Ethereum.

It can be like when I say Ethereum, I'm going to talk about John and I's Ethereum, like the actual literal chain of Ethereum. And then by making its own area and domain valuable, others will naturally attach to that because it is such a valuable thing, right? You're going to see, even though Tolly and Co specifically have said, like, anything that's not on the layer one is attack on us, basically. He just straight up says it.

And yet, you have a bunch of L2s that are cropping up. You have some protocols like a bullet, which is like their decks, which is, or not that decks. It's like a protocol, right, that settles off chain, but they post up to it. But, like, you have other teams coming to the table to develop these things, even though it's not been, it's been explicitly like labeled as like an attack on Solano. We don't want to drive value to it because it is something that these guys want to actually build. attached to because they see the future of a Solana. So I think like L2's definitionally

are not just like a parasitic thing that is bad for everyone. I think it's just a reprioritization and it could be okay that everyone like has their own priority to make their own stuff the best and the byproduct of that is everyone wins in my opinion. Yeah. I think the like the sometimes

just not satisfying answer to a lot of people is that the reality for this question is it's kind of the same as is X-Etherium. It's like this is a very fuzzy spectrum, and it depends on what you're trying to solve for and what you're trying to measure there. Realistically, every single chain and every single application, I would say, has this kind of just spectrum relationship of somewhere between parasitic, symbiotic, and altruistic. I think the outcome that you want in like any kind of free market application and platform

is that it ends up somewhere in that symbiotic range. Because in the exact same ways that L2s are, quote, parasitic to the L1, so are applications on Solana. The whole argument that like the extreme version takes of like they're strictly parasitic is because they're taking away cash flows the RV that would like otherwise go to the application being on the O-1, which is true. But that is exactly the same as in application implementing, you know, a just like better auction mechanism so that they're not leaking a shit ton of MEV to the L1 validators. Now they're keeping more of the money for themselves on their application. Like is that parasitic? By the same measurement it is.

And so, like, this really is just a spectrum of, you know, you're going to need to find the point of, you know, what is that split going to be of what is the percent of value? And we don't even know that, I mean, this is a different part of how do you even measure the value being captured? Like, is it from the moneyiness? Is it from the cash flows? Is it from the whatever? But you have to decide, like, how do we kind of want to measure that? And they need to find that symbiotic range of what is the percent that goes to the platform? And then what is the percent that goes to these application builders on top?

And my full assumption is like, this is a free market, everything is going to tend towards those platforms will be able to charge whatever amount of value capture proportional to the actual value that they are providing to those applications. If they're not providing enough value to those applications and those applications are leaking too much value, they will always leave. And so all that you can do as any of these platforms is just very directly, like, what are the best services that we can provide as a platform to make sure that these applications like they need to build here, that they really do have like lock into network effects here, you know, that we are to shipping. them the best product because otherwise, like, your value captures is always going to leave, whether you're Solana or your Ethereum. Like, if Solana is not providing enough value to pump on and they're leaking too much value, they will leave and they will go make their own chain. Like that same thing holds true. It's just like, where is that spectrum and where is that line? All that you could do is ship the best product, just keep shipping and keep giving them the best product. And you just

like, you got a hope that that'll get you the value capture. I'm thinking about this stuff. Like, refocusing on the L1, right? I think we can all assume if that happens, some value, will be removed from the current cohort of L2s that have been deployed. The tail end of L2s that exist today are the marginal ones that, you know, Ansgar was talking about maybe should not have existed. We haven't seen an L2 have to shut down yet. I mean, that's running a sequencer costs money. Having a marketing team and a business team and the DevOps cost money.

We're going to have a point, I don't know if it's accelerated now because of this shift, where some of these L2s have to just like close up shop and they say you know what the bridge bridge bridge bridge contrast contract exists you guys can technically still run your own sequencer if you want to do a CTO in like and and and order your own stuff and run your own chain uh i think that's probably going to be a little accelerated and i think that'll be a fun one to navigate whenever it actually does happen uh but i i think we're going to see that here soon with the reprioritization that's interesting yeah yeah i think the only notable wind down that we've seen i think was i you you saw it on a tech technical level, but a different market reason would have been the old D-YDX version. Oh, D-YD-X, they're all version. Oh, yeah, Aztec is the other one. I kind of forgot about that. Yeah, that would be the other one.

They shut that one down just because it was a proof of concept that they needed to just kind of like get into production. Yeah. Yeah. Yeah. And certainly DUIX. It was a wind down. That layer two did wind down, yeah.

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Fraxel for exclusive Fraxel perks and boosted rewards. Going back to the parasitic conversation, and I think the way that this relates to this, first the fact that Kyle Somani was saying these words is why these words have always like triggered the Ethereum community specifically like when is Kyle Samani saying it is very different than when like Onscar, Dankrat or, you know, Vitalik says it. The messenger actually becomes like the message. And like he, the thing that he was leaving out and the Ethereum community will say like willfully leaving out like strategically leaving out of that like layer two's or parasitic message is that they are parasitic. and symbiotic. Like, they both take and give back to the layer one. But I think he was, is and was, generally speaking, right when the Ethereum layer one is so weak that it could, that it is so easy to leach from. Like, with a very weak layer one, a layer two does capture a lot of

layer one value. Base, optimism, Arbitrome can capture a lot of layer one value. And that equilibrium is all off. And so if he, I think he was, if he was being more helpful and more constructive, he would have said, the layer one is so weak that layer two's can't help but to be parasitic to the layer one. And when we grow the capacity of the layer one, the equilibrium resets into a perhaps more beneficial spot where the value given back to and the value taken from, the layer one, is in some sort of sustainable equilibrium that, you know, does create a growing of the Pi ecosystem, which is always what the Ethereum community wants its layer two ecosystem to be like.

The fact that layer two's exist, it's a trade. You know, you give some value, but you get back value in return, and this trade is beneficial. You know, no tariffs on layer twos. And hopefully that is kind of like this line that we have to dance. To me, I see it so similarly to like the Federal Reserve interest rates. Like we need to have layer one capacity so sufficiently at a particular. particular level that like the marginal layer two really needs to justify its existence. And and otherwise like if are if the interest rates are too low, then too many layer

twos will crop up and, you know, then they shouldn't have existed in the first place. I see there's a lot of similarities there. You know, people have been doing a lot of like over the years you've done the country analogies, right, in countries and states and whatever. Honestly, and after this was after hearing the Haseeb versus a Gort podcast conversation. Yeah, the other day. Debate. I couldn't help but like analogize Ethereum to the whole of America at that point.

Right. If we're trying to export dollars, right, as to the rest of the world, right? The rest of the world could be other countries. Like, could you imagine the U.S. getting rid of basically all, all consumption, all usage and just saying like, hey, just use our dollars. Like if it wasn't a strong nation and trying to export its thing as money, no one's going to want to use the dollars through the rest of the world. Right. And that's what the L2s are, right? Some of these relationships are pretty fickle, right?

They don't have to use it if they don't want to. But some would to because it is a strong thing or it was a strong thing. And now that it's showing weakness, like, you know, maybe some of those countries are going to reprioritize. And yeah, I just think that analog came back to my head whenever I started hearing that conversation. And I just tried to think of a world where America tried to be the dominant asset, exporting its money, but was not a strong nation itself and how that worked out. I just like that we went from saying how Kyle didn't help to using two different reasoning by analogies

to have a for a theory of mentalties. I'm just enjoying that part. Beautiful place. I just came here because I know I teach you guys earlier. I want to see like how if this is the natural outcome of a roll-up centric roadmap, right? It's like this is the thing that is needed. You've got to drive your own fees. You got to be a dominant asset.

that you need to have power within this power dynamic. Bitcoin's the same thing, John. I don't understand how you could be so bold up on it if it's never going to drive fees. Okay, Brett's pivoting the conversation to the Bitcoin roadmap here. And so now we're, Brad, maybe you can just lay down your premise, just one more time, just like, lay it out on the table for us. I like so look man

I think we all understand the we understand the dynamics of the security budget of Bitcoin right eventually the thing that is going to pay for it to secure the network is going to go to zero subsidy goes to zero every happening right so that means

with that going to zero you need usage of the chain in order to drive value to the chain frankly outside of just like hoping people buy the thing because they want to buy the thing Ethereum and Bitcoin as of like, I don't know, I guess a month ago, had basically the same roadmap.

We're just like, okay, we're not really going to scale the L1. We're going to export this thing to a bunch of other chains. You had the lightning network. And now you're actually like there's been a resurgence of Bitcoin L2s. And it's like now they're largely the same except Ethereum is programmable at its base layer where Bitcoin is not, but trying to do Opcat, all this shit. And it's like, in the future paradigm of Bitcoin, which is today. Ethereum, it's running into issues with that because you see the value accrual in that situation that you would hope to have at the base level is basically nothing, right?

Like these L2s can extract all they want. They don't really post a lot back to the main net, but they actually get to claim a lot of the benefits of it. Yeah, sure, maybe you have a little bit of the export of the money in this, but like you lose faith of your users, like there's no fees being driven. Like just value accrual in that world is not great. So if we've lived out that roadmap through Ethereum and now we're going like, oh, Like maybe that's not the best way to go.

You need to have a little bit of a balance here. What is the fix in a Bitcoin world where the Bitcoin cohort is pretty readily saying, don't ever do anything on Mainnet ever, like zero. So what's the solve there and how would they avoid this outcome? So I think it's really easy, the Ethereum versus Bitcoin thing, because you're just trying to solve two totally different problems. Like the entire premise of what we're trying to solve for here with the reprioritization, strategic pivot and Ethereum, blah, blah, blah.

It's not, you know, are we trying to fix the chain so that it has a sustainable security budget? It's how do we make ETH not worth $150 billion? How do we make it like $5 trillion? That is just a totally different, like, problem to solve for versus, hey, can we get Bitcoin to a point where it's generating, like, enough fees that it's probably not trivial to just like 51% attack the network. And I would say that those are roughly like two order of magnitudes apart in terms of difficulty of what you actually need to achieve.

Like it's somewhere in the millions to billions of dollars of like annual fee revenue that you need to just be like, it's not trivial to go 51% attack the thing, that there's like a sufficient level of security. I think there's also like a non-zero probability that this ends up going away and you end up with like a pseudo-POA realistically cartel of miners and you're just kind of. if we know that like who's mine at the chain and you kind of all trust that. That's a long way off. That's a different possibility. But like an absence of that, like you're just trying to solve for a much, much, much, much easier problem. Like Ethereum is trying to solve for how do we generate, like you would need tens of billions,

hundreds of billions of dollars of RV per year to like actually reasonably sustain on a cash flow basis and assets that's worth many trillions of dollars. Bitcoin is just like totally decoupled from that. It's a completely separate issue. And even if you did get like a trillion dollars a year of RIV in Bitcoin, I mean, it's very strictly like not valued on any of that. And it wouldn't even help the valuation of it because like literally all that goes to the miners anyway. Like the economics of Bitcoin from a holder perspective are like set. Like you know exactly what you're going to get. You're going to get inflated every year. Like you're not going to get any value capture order to the network. So the value of BTC is like totally decoupled from can we like generate enough fees. It's just a matter of can you generate enough fees such that. you like people aren't attacking the chain. And to be fair, I think that like is a genuinely open question. Like there is a possibility that that just like that kind of goes haywire in five, 10,

15 years from now, whatever that you know, you're not generating enough fees. And we don't kind of have a stable enough agreement of, you know, how we're mining the chain. That's like, it's a possibility is to help risk. I think that you just like, you take a positive view. My pretty reasonable assumption is like that's going to work itself out. Either you'll generate enough fees or by the point this kind of happens. this is so far away that it doesn't matter. And we just kind of follow the chain at that point.

And we know who's mining it. But we'll see. But yeah, I mean, the very TLDR is I think you're just like solving for a totally different problem. Yeah. Yeah. And the time horizon so long that the variables between now and then are basically infinite. Yeah. I mean, this is like the classic.

I mean, like I kind of dunk on this when you tweeted it. It's like when Justin tweeted this about this. I don't remember. It was probably a month or so ago. And I think a lot of people piled on myself included. was he was talking about how like Ethereum is going to win because the Bitcoin security budget is going to fall apart. And like I see this all the time. And I think there are genuine concerns.

Like there is a very non-zero probability that there's a problem with the security budget with Bitcoin at like some later date in the future. It is not going to be the reason that any of these other chains wins on any reasonable time span. Like you can't bank on the fact that Bitcoin is going to have a security budget problem in like 2038 as the reason why we don't need to like scale the L1s. today. That's just like these things don't make sense. Like the users are all going to be gone. You will have won or lost at that point. And that's what I think people kind of need to realize with it. I think it's possibly a problem with Bitcoin in the longer term. It's not an immediate short-term problem. And I think it works itself out, which is also why, I mean, the same thing with these roll-ups. It's like, yeah, I don't think Bitcoin roll-ups are ever going

to generate, you know, any kind of fees that are going to justify, you know, a multi-trillion dollar valuation of an asset. It's just, hey, hopefully they're paying enough, like, reasonably consistent fees that, you know, miners are, like, doing okay. And I think that's a point that you can probably get to between various L1 and L2 activity on Bitcoin. I mean, I also think that Bitcoin will increase the block size eventually. I mean, they've already increased the block size previously, like even though people don't like to like phrase it as that. Like they already have, I think they will in the future. People have like very reasonably spoken about that. I think it'll be ways off. But yeah, I mean, I think that on a technical level, a lot of this ends up looking the same,

but you just don't know about the same problems because you're trying to solve for a completely different thing. And I mean, that's why Bitcoin, I think, has an easier time with all of this, too. And, you know, will their, like, L2s stay aligned and more Bitcoin-centric? Is, definitely they will. The only reason for them to Zix is because, like, people really fundamentally want BTC as an asset. None of these other assets, whether it's ETH, sole, like, insert your token of choice, have within an order of magnitude, just, like, literally user demand of, hey, I want to own and use this asset.

And it's fungible. Like you could deploy a layer two and people are going to want to use USDC or Bitcoin on these layer two. And like you literally start to see that in the numbers of like I had seen in the last week, like USDC trading volume on Ethereum layer one surpassed like ETH trading volume. If you look at like WBT and CBBT volumes and like amounts held on chains like base, arbitram, like those are all just going on consistently. And that's because like as you break down the touch. technical barriers across these chains, people are going to use the asset that they want to use.

And ETH, Seoul, none of these tokens have such an inherent desire as BTC. Like, people just want to hold BTC and use that. And so people will gravitate towards those solutions. Everyone else is on hard mode. Like, you just have to ship the best technical product. Bitcoin is the only special snowflick that gets to sit back and get like, yeah, we've got the best asset. Like everyone else kind of figured out and build on top of us. Like, they get a much kind of easier ride at it.

And you could still screw that up enough, where if you literally can't build any of this stuff, and the technical solutions are so bad that people can't get reasonable access to BTC, maybe it ends up being a problem. But it ends up being a much easier problem to solve for them because they don't need to solve for meaningful value capture and they have a fundamental user demand to begin with. Like everyone else is kind of building on hard mode.

They have a much easier problem to solve. A lot of the problems that we talked about in the Ethereum pivot episode, all of Ethereum's malaise, is coming from the decline of the eth price as it relates to Bitcoin and everything else in the market. And, you know, I have my opinions on this.

I'm very happy that Ansgar-Dankrad elevated this idea that, you know, there is a re-focusing, a strategic pivot by, you know, Ethereum leadership to refocus on the Ethereum layer one for growth of users, for growth of applications, for builders, for all these things that we understand to be good. It was the decline of the ETH price that I think informed everyone that something is amiss. That was the information that the market was telling us. I think Ethereum should just focus on exactly what Ansgar and Dankrad said and focus on that roadmap, grow the layer one, grow fundamentals, grow users. And just don't talk about ETH.

We should just not talk about ETH. One of the big problems in the Ethereum community is like, oh, we need to fix our messaging. We need to fix our messaging around ETH. All we need to do is come up with the ETH one liner to sell it to BlackRock and to TradFi. And then we'll fix Ethereum's problems. and that has been like this idea for like three years and no one has really come up with like the one liner for ETH we have been pushing on this like narrative problem for ETH

for a long time now no one's come up with a good solution for it and I think that that's signal and while I think it's I think we maybe like there are smaller circles maybe I'll do a podcast on this maybe we can talk about this right now of like okay what how do we like think about ETH the asset in 2025 but broadly speaking I think the Ethereum community myself included I'm talking mainly to myself here should just stop talking about Eith

and does grow the fundamentals of the layer one, grow users, grow devs, market Ethereum, sell Ethereum as a product to the world. And we'll talk about Ether like later, but now is not the time to like try and push on Ether messaging and marketing to the market. And instead we ought to sell Ethereum the product rather than ether the asset. That's kind of like my loose take. Brad, what do you think? I think John and I solved the messaging a while ago.

It's the unstoppable computer. that's the one I settled on honestly and if it's growing its domain I think it's like that's all the more true right as long as it preserves those properties I think like one

yeah like talking about price is just you know never a good look and totally notoriously talking about soul he's just always like dude it's just there to stop spam it's like I don't care

like that's its purpose like I don't I'm building a computer or trying to build decentralized and NASDAQ whatever if Solana is useful as a byproduct of my technical ambitions, so be it.

And I think that should also be the case for, for Ethereum. And like if you want a one-liner clip, again, I like the unstoppable computer stuff. If you grow the Ethereum domain while preserving the censorship resistance, the liveliness, all that stuff, you still maintain that title of the unstoppable computer, but you're just better at it. You're a better unstoppable computer. And I think that should be the goal because you get moneyness and usefulness as a byproduct of being the thing.

Yeah. Yeah, I'm very much on the side of, I think, a deprioritization of speaking about the asset would be like pretty beneficial. I mean, the practical reality for all these is even for Seoul, I would say is the one that has been the closest at times to like, you can reasonably like make an argument for it has a like somewhat reasonable valuation at times. If you take like it's peak Rav where it's annualized, it was several billion dollars a year if you annualized it. Like, you could have an like an aggressive but, you know, defensible multiple on that of like a 30x multiple. And you get to that like 100 billionish market cap. The reality is like people weren't actually valuing it based on that. The market is going to give you credit for the fact that this, hey, this whole big computer in sky, smart contract platform, whatever, defy, all this stuff turns into it a few years. Like this is going to be a trillion, multi trillion dollar market. Like what do we want to see is, are you winning that market and are you growing?

The reality is that's why Seoul went up a lot over the past year. I mean, the fact that it has gotten all the RV is like helpful. those charts are open to the right. It shows that there is a path to value capture all of those things. But the reality is the market has a trisclay completely re-weighted its probability of people using this, this is growing. They are much more likely to win in the long term at this point. Like there is a big market to be had here.

We don't know what the breakdown is going to be. What like what margin does an L1 take on MV in the long run? Is it 1%? Is it 6%? Is it 15? I have no idea. Is that market a trillion dollars, 100 billion? I don't know.

You're taking some recent assumption. This is a really big market. Who's going to win? Who's growing? You just got to show that. If you show that, things are going to work itself out. And, like, as a byproduct of doing that, the reality is all of these RV type numbers for Ethereum. Like, these charts are also going to go up into the right.

If people are using the all want to go and, like, fees are going to go up. No, you're not going to get to a point where you're going to have a strict cash flow in a year or two from now. That's to be like, hey, based on this, I can back into a trillion dollar valuation. Like, you're just not going to get there. But just winning that market and showing a pass. to growth and that outcome is like that's all that's all you need to kind of get the valuation and recognition. So I want to look up.

John, you've notoriously pushed back on talking about L1 asset prices broadly because you just like, you've said, hey, maybe they're all overvalued, right? So like Solana is going up because there is something above it that is a smart contract platform that is an Ethereum that says,

oh, well, if Ethereum's doing this and it's valued at this and Solana is doing this, it deserves to be here. And that's giving them conviction and buying. into something. But like there is a world in the future where you overpriced it at the start and with saturation to the market of smart contract platforms, they all get pulled down, right? Like that top bar is maybe it was overpriced the entire time. No one wants to hear that.

I don't want to hear that. I have a lot of these things. But that is that that's a potential outcome too. What is the value of this thing where we're getting more chains coming to market? Right. There is saturation. These fees are compressing because the, the applications atop them are getting better and smarter at capturing their own value. So like what value does the underlying platform actually provide to these things? And what is that worth? Like that's a separate conversation. And I was actually going to look back at like other assets on a smaller scale.

And if they displayed the same thing, like I want to look up Doge, right? Doge was one of the first big meme coins. And it went to fucking, it's the thing. It went to the moon. Like everyone's all excited. I actually was going to see how close it got back to its all time high. But you can say the same thing for like NFT projects, right? Punks, board apes.

They all went crazy high. because they were there. They were the first. Everyone started pricing things against these things. Market saturation came along. A shit done of meme coins came. A bunch of NFT projects came. And everything started compressing lower because there's just more things.

And maybe there's a potential that we just overpriced them day one, right? And then everything just kind of normalizes over a couple of years lower. I don't have anything to get like, no questions following that. It's just like, guys, maybe it all went too high. I don't know. It sounds like a Bitcoin. Well, this is why Bitcoiners say 21 over infinity, right? Like, yeah, Ethereum had a moat and dominance for a very long time.

But as soon as people learned how to commoditize Ethereum, then 10,000 Ethereum showed up. You know, Solana, Avalanche, Phantom, Now Sonic, like, and all of its layer twos and all the layer twos that Celessia wants to make. And so there's no moat there. And so the only logical strategy is to just do one thing, be finite supply, and never advertise any other utility or any other. value out of your ecosystem. And, you know, I once upon a time thought that that was like silly and foolish and I have been proven wrong. Like that was, it turns out to be a genius level move. For now. For now. For now. Yeah. So when we were, um, zooming back to where we were in like 2021, 2022, the ETH BTC price was like at its at its all time high December 2021, not all time high.

Sometimes I kind of like over, I think the 2017 all-time eye of ETH BTC price was just like not actually a good thing to reference against, but, you know, ignoring that history. ETHBTC peaked at 0.088 in December of 2021. And then it turned over. And I think it like turned over for a handful of reasons, right? We started pushing users to layer two's. Layer one stopped accruing revenue. Ethereum got credible competition. and credible competition was maturing at that time.

That was right before like the fall of the fall of the whole entire market in 2022 with starting with Tara Luna, then three, three rose capital and then FTX. But like credible competition started to really mature right at that moment in 2021. So John, like how do you understand that story? Maybe I think a possible answer is like, like don't worry about it. We don't have to like precisely pin down about like, why ETH stopped going up versus Bitcoin.

But if you had to actually diagnose it or like autopsy it, was it the collapse of revenue, lack of growth at the layer one, lack of user growth, lack of development growth, like what do you think accounts surmounts to all the reasons why ETHBTC stopped growing? I think it's a mix of a few things over the past few years. I would kind of bucket it. I would put it into two buckets broadly. One is I think that there was more of a reasonable, like somewhat reasonable belief in the market of two, three, four years ago, whatever, that Ethereum, Eath specifically would actually, like, credibly compete with Bitcoin. It's like, hey, this ends up being, you know, the non-sovereign store value, reserve asset, blah, blah, blah, like all of that.

Crypto second money, yeah. Yeah. Yeah. Like, it was, it was not the base case, but, like, people would very plausibly and reasonably believe, like, hey, this is going to happen in a few years from now. five years now, whatever, like, it could actually win. I think that belief is, like, mostly extinguished from the market. There are corners of the market that still really believe that. I'd say for the vast majority of the market, that is just like, all right, like,

this game is over. This is not happening. Or if it's ever happening, this is, like, 20 years away and we're like, we're not worried about this. This is just like, it's not a thing that we're thinking about in pricing these things. It is so clear that BTC is this special snowflake. I think that, like, we in the crypto world have a much easier time of, like, speaking to ourselves in a bubble and telling ourselves like, hey, this is a totally reasonable idea.

Like, this is this, you know, Ethereum is better. It's got all these cool things. And then you, like, realize and you go to talk to a boomer investor. Like, wait, what does the Ethereum thing do again? Like, Bitcoin is the digital gold. Like, what are you talking about? And I mean, very literally you see that. And I mean, like, political stuff in the past year. Like, there was no serious conversation of anyone in the administration of like, oh, should we have an Ethereum strategic reserve specially segmented out. Like, Bitcoin is a special snowflake. They get the SPR. And then everyone else gets this other thing where like, maybe we dump your tokens or like maybe we don't or like maybe we put it in the shelves.

Like, we don't know. Like, Bitcoin is the special thing. I think that like particularly as the space has grown and we are less of just like it or a little crypto bubble, we realize like, yeah, the normal world is Bitcoin is the special thing. Ethan is not competing with money. And so I think that you just see that price state of like, all right, we can't reasonably compete as a what is the percent chance that Ethereum ends up flipping BTC is the money, like, which is one way to price these things. like, hey, we think this is a multi-trillion dollar outcome. Like, there's a 10% chance that it wins. So that's worth, you know, however many, $100 billion. I think that probability is like mostly gone away. So that just shrinks kind of like the whole just general smart contract market.

I would say relative to BTC. I think that has definitely been happening over the past year and just like continues to accelerate with all the macro stuff now. Like, again, like nobody's seriously talking about ether, any of the other assets in that bucket. It's like, hey, do we see Bitcoin decoupling from the market and trading more like gold, all of those things. So one is that notion just kind of went away. It's like, all right, so now we have this separate, like, this is the smart contract bucket and nobody is worried about this competing with BTC for now. And then we have that separate question of like, okay, within that bucket who is winning? And like, I would say undoubtedly just within that bucket, the relative share and understanding

of like, okay, what are the odds that Ethereum wins with even within this smart contract bucket? That probability has been just consistently going down for the past two or three years. People are saying, oh, yeah, there's a much higher chance that we didn't think this is real, but like maybe Solana is actually just like the winning smart contract platform in a few years from. know that that is like a totally reasonable possibility where I don't think that people would have assigned a meaningful probability to that a couple years ago. So really it's just segmenting into these two small into these two buckets of there's the money bucket. We've kind of given up on competing for that at least like any time soon. So we've already decided, okay, we have a smaller

bucket here now. And then within that bucket, the probabilities have also gone down. So that's why you see ETH BTC going down from the first part in part. And then also like sole ETH and stuff like that keeps going up in that second part. Like even now in the downturn over the past couple months, like Solith has just kept grinding up the all-time highs, even though like everything's kind of down. But like that is more that second part of just, okay, even within the bucket, the odds of winning that just continue to kind of a decline. You know, I had two comments on that.

One thesis was for for three, it was just like productive asset. Right. It's like, okay, BTC is out there digital, cool, but like, try if I's bricked up by productive assets. They love yield, right? bond market is much bigger than gold market. So like, okay, cool, that's there, get some passive stuff. Run some DCF because you can actually do it and then have fun, right?

So that was one thesis for why they would buy into it. Unfortunately, as part of this value accrual stuff, we're seeing with the L2 or roll up roadmap, is just that like the DCF actually kind of breaks down a little bit too whenever you start doing this shit. And then like you start removing your actual cash flows and then you can't run the model and then things start looking weak across the board. So that is one. And the other thing is after seeing like, you know, the Trump tweets about like, you know, by Eath is I had this this latent thing in the back of my head.

It's like, these guys are rerunning the education that we've all had in this space from day one, right? Like whenever you come in, you hear Bitcoin, like, okay, Bitcoin's digital gold, cool, cool, awesome. And then Ethereum's number two on the board. Cool, you get Ethereum because it's the big one. It's driving all these values, whatever. So, like, kind of this, like, dumb lag time of, like, understanding what is, like, what even this technology is.

like they're just going to default ape into some of this stuff and kind of will it into existence, kind of how they are with Bitcoin. The downside to that is that, or not downside, but like, what I'm unpinned that is you start seeing some of these people coming forward are very, very intelligent with how they understand these protocols. And they can actually go beyond that step. So like, yes, you'll have like the Trumps of the world tweeting, now's a good time to buy ETH because they're doing a world liberty fire and main net. And like they're doing all of the stuff that we would have done in 2021. But then you have the second. class of investors that are coming along that are very intelligent and I understand the conversation

actually are doing the DCF on the actual numbers that are actually happening and then the education actually runs upstream that way and then like okay those guys aren't actually aping into it because of the things that that came as a byproduct of the role-centric roadmap and not being able to actually like do these things as companies there's a lot there that's a big that's a big thesis yeah the thesis is that like the idea is that they are just going through the crypto rabbit hole as we all have, except they are doing it with an accelerated fashion and with advisors. Yeah, it's complex. And like, we're all humans. And like, I wouldn't say that they are, like, some of them are intelligent, yes. But there are some people who are materially not as intelligent as others. And I would say people even within this space. And like, they're going to run, they're going to rerun a lot of the emotional stuff that we did for a lot of the reasons that we did it because we're all just humans. So I was banking on a level of that and like seeing again, the Trump people, doing the world LibertyFi, tweeting about it and stuff.

I was like, it was so obvious to me that by the time they were tweeting that stuff, that that stuff was like not the play. It was like, guys, things are kind of shaky right now. Things are weird? But these guys are still buying into it pretty hard? It's like, are they going to run it back? Like, are they going to, but at the larger scale because these guys are, you know, the little family of the president of the United States.

And like, what impact does that have on all this stuff, given how small our industry is relative to the rest of the world? So I think that was, that was in the back of my head is like, maybe maybe that's going happen man i don't know i do think not to make this political but i'm going to make it political the trump affiliation with crypto is not good for crypto uh we have been aligned with a particular person and political side of the political aisle and a very contentious side of the political aisle and we were once as like very like neutral technology that just existed that you know we were getting oppressed by Gary Gensler, but at least we were neutral. And now, like, the association,

the branding of crypto is very just so political now. And I wish that that wasn't the case. I prefer being liked by one side, especially when that one side is winning than being disliked by both sides. I will say that. Is that where you're saying that we came from? Yeah, I think we were more we came from. We were disliked by both sides. I mean, like, literally Trump's first term, like, he did not like Bitcoin. He was like, this is. He was, he put out a negative anti-Bick coin tweet, I'm a fan of the U.S. dollar, but that was it. There was no, there was secretary minutiaen trying to ban self-hosted wallet. So there was that. In general, I would say the regulatory environment was, I mean, a lot of it was still just early of like people just

understood it less. It was a little more apathy compared obviously during the Biden administration was much more aggressive. But like I wouldn't characterize it as a positive, just general sentiment or regulatory environment previously. So I mean, I, I agree. I would. obviously like for it to be neutral and like be a political. I would say it was probably a good bet, though, for the last four years at least at this point. That particularly I think it was at like a relatively pivotal time of, I think if you're able to take advantage of it and get a lot of legislation through the next few years, and then hopefully I think it will move to being much more just nonpartisan over the next couple of years. Like I think both sides of the aisle are going to realize, I mean,

it just doesn't make sense to be anti-crypto. It's like being anti-dogs. Like what like why? There are people, there are a lot of people who like dogs. Like, there's not a lot of people who like hate dogs. It's the same thing with crypto. Like, there's a lot of people who like like, will vote for you for it. There's not a lot of people who are going to vote for you like, especially because you're anti-crypto. And like, I think most politicians on both sides have realized that.

Like, you can lose an election because of it. But like, it's not going to win you any votes being anti-crypto. And like, I think that we are finally moving to that regime. And then we have to fix the like, okay, but there is still some level of negative sentiment on both sides, particularly with all of, I'd say, problems that we've had over the past few months with a lot of stuff that doesn't look great, being politically motivated and stuff like that, using crypto. But yeah, I'd still say I would take the current environment, certainly, over where we were,

you know, a year ago. You think they warm to it whenever they see the level of dollars exported through stable coins? Like, it's becoming such a thing that, like, now we're even talking about it encroaching on, like, the native value of L1s, right? We're saying, like, these things are stable coins are parasitic to Ethereum, right? Because it's taken over the flows. like they're blown up in volumes, like they're going crazy. Do you think from a non-crypto perspective, seeing the strength of the dollar in our ecosystem

that is continuing to grow in the use cases that come from that, that specifically will help them warm over the next few years? I think it's going to be different for different people. I think the stable coin thing is probably the most useful at a direct political level, because you just have a lot more people who are just thinking strategically in terms of like, okay, how, you know, they have a lot of foreign policy objectives. and just like monitoring objections. It convinces smart and important people.

Exactly. Yeah. That is what Stablecoins does. My guess is that it's not going to be the type of thing that it's probably like swinging public sentiment like that much in the U.S. Because, yeah, I mean, this is not the kind of thing that the average person cares about that much of like, oh, are we helping export dollar dominance and like lower our yields and finance our debt by doing this? Like if they're not using it when they go buy Starbucks, like they probably just don't care about it. So I think a lot of stablecoin stuff will be very helpful on the political side. I mean, a lot of that trickles down too into what the public sentiment.

Domenos. But the onus is on crypto for us to ship, like, actual consumer-facing products that people use and understand for people to, like, actually think of those things and not meme coins when you talk about crypto. I mean, this is part of why I think a lot of, like, meme coin hate gets overblown. The internet gets used for terrible things. The reason that people fixate a meme coins within crypto is because meme coins are just louder than all the things that we are doing good in crypto. We have not built enough, like, consumer-facing apps that which obviously drown out all those bad things. The internet is used for terrible things.

But, like, no one would question that, like, the internet is bad because you use it all the time, use it for great things. Like, all these consumer-facing applications that were using the other day. Like, crypto just needs to do that. And then you will have much more positive sentiment where the average person just thinks of, oh, I think of this app on my phone as opposed to, oh, I hear about the silly meme coins all the time. It just needs to be more present and important, like, consumer-facing products, just like basic financial products. Once you get that, then people will be more positive.

But yeah, all the stable coin stuff is definitely super helpful in like the political side particularly. Because it obviously helps with a lot of potential like U.S. objectives. Political side in the U.S. And then I would say consumer outside of the U.S. I think like that's that is the hard thing with an like you don't sell dollars to an American because like we have access to dollars. It's easy. It's stable. It's like it's a secondary thing.

We have WISE. We have, you know, Venmo, all this shit's easy. But if you send it to someone in Turkey or someone in, you know, Uganda, right? Like there is value there. because it is materially different than their day-to-day, which is why you're seeing adoption internationally. Yeah, exactly. Brad, John, as we wrap this up,

we are actually missing a person who was potentially going to be on here as a fourth person, but they just said they were sick. We are potentially thinking about doing this on a reoccurring basis. I enjoy chatting with you guys. I think you guys are wicked smart. I think you guys are great conversationalists. And I think if the bankless community likes this episode, they should let us know because I'm peaked about what we could talk about now and into the future.

Maybe we can look forward about a week. The Ethereum community is digesting the whole pivot thing. They're going to digest this episode. We're talking about content coins right now. I don't know if those excite you guys or not. But overall, I'll kind of just give you guys the podium for a moment. What are you excited about right now? What are you looking forward to?

Brett, I'll start with you. Well, now that content coins leads to an airdrop. Like, everyone's perspective on this has changed. Jesse's been helping everyone out for the last few weeks, but no one really. realized it. Yeah. Do you think he knew about the Zora announcement when he was doing this whole push?

Because the timing is a little suss. It's, it's suss. So look, I like Jesse. I think he's a good guy. He says he wasn't aware, so I'm going to take him at his word.

Oh, he said that? I missed that. Yeah. If he said it, I believe him. Yeah. If I'm recalling, correct, I'm pretty sure I saw on the time. I just like, no awareness.

He's like, I just truly believe in this. So, like, if that's the case, I do believe that. Yeah, I'll give him benefit of the doubt. For sure. But yeah, for me, like, we're actually, you know, when is this, this is going to drop tomorrow? He's going to drop tomorrow, the 23rd. Okay, so then whoever's reading this, go check out the Mega Mafia 2 drop.

We actually, our accelerator just launched. It'll be tomorrow morning for us, but today for the people listening to this. Yeah, so we're getting an accelerator spun up for Mega-Eath and then, yeah, getting out there and playing. I actually want to play in the Hyper-EvM ecosystem a little bit more. Cool. John, what's exciting you these days? I'm a boring guy. I like Bitcoin and stay.

coins. And genuinely, those are the things that I'm most excited for this year are, like, super basic stuff. Investing in them or like what, like, what's the just products coming? I mean, yeah, both, I would say. Like, I am very, Bitcoin is the monetary asset. I think that will just continue to just be more obvious. I think that's becoming, like, more present now with a lot of just geopolitical uncertainty.

I think that will just, like, only continue to be the case over the next few years. I think it will become a more globally important monetary asset. I think that like seems very, very likely. I think stable coins are going to be more important. Like I'm very on the, I think most of the stuff that crypto is good for, we kind of know what it's good for. It's a lot of the basic stuff. It's money, self-custodial, non-sovereign value. It's centered around the dollars around the world really fast and cheap, getting into people who don't have easy access to it, all that stuff.

I actually tend to be one of people who gives a high degree of freedom to, you know, the Zora and base, whatever. I will give a lot of benefit of the doubt to, you know, we should try new things, you know, go out there, go experiment. I also don't think it's going to work. I don't think the core idea is like probably going to stick. But like I like to see people experiment with a lot of these like very consumer, more social-centric applications. That's great. Get stuff out there. Hopefully we can get some applications that more normies use, get a more positive association with crypto.

I think that's the ways off. Yeah, I really like the basic stuff. basic stuff, crypto is great at it. We don't need to find these like million, unique, crazy new things that crypto is good at. We know crypto's good at. Six contracts? Really good at it. You're a six contract believer? Directionally. People take that as a pessimistic view, but I don't think that people realize, like, most of the people who think that there are six smart contracts is just like, it is a useful way to say that those six smart contracts are really, really big. And like most of the stuff that we call consumer applications, like we can call them

information finance and prediction markets and like creator monetization underneath, it's the same smart contracts. It's like launching new tokens and trading tokens underneath. What is the core mechanism underneath polymarketers or in all these? It's launching new tokens and trading tokens. It's the same idea. That doesn't mean that there aren't like a million use cases for it. I think this is a gazillion use cases out there for it.

But the basic stuff that crypto rails are good at, we know. And I think the basics are really going to shine over the next year. And I think that you will start to see it be more serious and more important on a global level. When you see Bitcoin as an important macro asset, you see stable coins like actually becoming a real thing that governments are starting to think about of, oh, this is like a real thing that people are using at scale in all these foreign countries. Like, what do we do about this? What is the regulation going to be? I think all of that's going to be really exciting for the next year. So I'm high forward.

Yeah. Yeah. I do think that there is a conversation that I'll just, I've talked about this with Haseeb. And I'll name the conversation. Maybe we can pick this up at a different time because we're running out of time here. But there's like the barbell idea of crypto where you have. Bitcoin on one end and stable coins on the other. And the middle is thin. The middle is the idea of coining content is not mainstream. The idea of like this smart contract digital nation in the sky with

NFTs for identity. That part's not real. That's that's thin. And that's like the barbell, the Bitcoin stablecoin barbell, no, nothing in the middle. And then there's like the thing in the middle, which is like, you know, Ethereum richness, like on chain culture, crypto culture, whatever was the vision of 2021, like on-chain, Metaverse, what are, you know, all of these things, consumer applications, coining content. That's like the middle of it where, you know, on-chain richness is what I'll call that. And on-chain richness is in this present era of crypto, not winning that tug of war. The current tug of war is being won by Bitcoin as a global reserve asset and stable coin as payments. And those two ends of the crypto barball are very, very strong.

Now, the pendulum, I think, shifts back and forth, and the pendulum is weighted towards Bitcoin and stablecoins. I'm personally here for the on-chain richness. That's what excites me. And so I'm looking forward to that pendulum kind of pointing back towards the middle. That's kind of how I identify the current state of play. I think the gold nugget there is that the on-chain richness is probably getting a grow proportional to the other two, right? Like if both of those things go up astronomically from here, there's going to be so much liquidity and volume and just straight up money in the ecosystem that the splash on effects of that.

will grow a lot of stuff exponentially from here. Or at least that's the hope, right? Is that like because there's just, there is a lot of velocity in the ecosystem because you're one hop away from Bitcoin at 500,000, like that's going to fall into some. Someone who got that early, they didn't sell the pizza or didn't buy the pizza, right? They decided to buy the node monkey and then they tried to take that over to go buy it and are swapping into a crypto punk. So like that level of crypto culture stuff, I think is just going to be downstream of that

and proportional to it to a degree just because you are so close to it. Yeah. Yeah. The literal dollar trickle down from BTC going up has clearly reduced to the rest of ALTS over the past few years as you get just a very different buyer base for the asset.

But it's still there. It's still a non-zero trickle-down. And you get a lot of the soft benefits around the edges of whether that's, I mean, just positive sentiment, regulatory, much more clarity as a result of, hey, these serious things. things are being built. And then stable coins are just, I mean, they're just good consumer

products. They help you build just like actually good consumer facing products and get people on chain, you know, getting used to the idea of self-custody and wallets and like, what are these rails? They're a great way to just get people in. And then that gives you the freedom of like, hey, more people who understand this stuff, when people are using this stuff, we have regulatory clarity, we have all those things, even if it's not like literally the prices going up. It obviously benefits everyone if, you know, Bitcoin is a legitimate asset around the world and people are using stable coins and we're building out the rails here and we have clarity and all those things. That's great for everyone here.

Brad, John, I thought this episode was great. Really appreciate you guys coming on the show and just hanging out with me today. Yeah. Thanks for having fun. Bankless Nation, you guys know the deal. Crypto is risky. You can lose what you put in. But nonetheless, we are headed west. This is the frontier. It's not for everyone, but we are glad you are with us on the bankless journey. Thanks a lot.