Bankless - The Ether Machine: How ETH Becomes the Internet’s Reserve Currency | Andrew Keys & David Merin

Episode Date: July 28, 2025

Andrew Keys and David Merin join us to unveil the Ether Machine—a bold new strategy to make ETH the internet’s reserve currency.  We unpack their ambitious plan to acquire and actively manage hundreds of thousands of ETH, why they believe ETH is more than just a treasury asset, and how institutional capital can finally understand and tap into Ethereum’s full potential. From staking and restaking to DeFi yield generation and Wall Street education, this episode explores why Ether is not just digital oil—it’s the engine of the next internet. ------ 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24  https://bankless.cc/spotify-premium ------ BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax  🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain  🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle  🟠BINANCE | THE WORLDS #1 CRYPTO EXCHANGE https://bankless.cc/binance 🦎COINGECKO API | REAL-TIME CRYPTO PRICE & MARKET DATA https://bankless.cc/coingecko ------ TIMESTAMPS 0:00 Intro 1:32 How Much Ether? 4:57 Other ETH Treasuries 9:41 Ether Machine 12:46 ETH vs BTC 17:27 Ether Machine DeFi Strategy 21:14 Explaining ETH to Wall Street 26:01 How Big is ETH? 28:14 ETH ETFs vs Ether Machine 37:13 Andrew’s Journey 40:54 Gensler’s SEC Era 43:30 Michael Saylor of ETH? 49:29 Decentralization Worries 52:09 ETH’s Narrative Problem 56:47 The Institutional Cycle 1:00:41 Closing ------ RESOURCES The Ether Machine https://x.com/TheEtherMachine  https://ethermachine.com/  Andrew Keys https://x.com/ak_ethermachine  David Merin https://x.com/dfmerin  ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

What is ether? Ether is the commodity to the future of the Internet. Ether is the fuel for every computational step necessary to process a transaction on the future of the Internet. Bankless Nation, very excited to introduce you to our next guest. We have Andrew Keys. We have Dave Marin of the Ether Machine. How are you guys doing? We're great.

Thanks for having us on. Thanks. Before we proceed, I would like to first remind everyone that this podcast may contain forward-looking statements, including, but not limited to the Ether Machine and Dynamics, expectations or predictions or assumptions as the completion of the proposed transaction between parties, operational performance, including but not limited to the timing of development milestones, business and operational strategies, competitive and industry outlook, and the timing and completion and the execution of transaction. Forward-looking statements are inherently subject to risks and assumptions, and they're not guaranteed as a performance.

I encourage you to read the previous latest-plust press release issued on July 21, 2025, and Dynamics is filed with the SEC, for discussion of the risk and discussion of the combined entity after completion of the closed business combination. Dynamics and EtherMachine are under no obligation and expressly disclaim any obligation to update or otherwise revise any forward-looking statements, whether a result of new information, future events, or otherwise, except as required by law. In addition, these remarks are neither an offer to purchase nor solicitation of or buy any securities or the solicitation of dynamics and accommodation. In connection with the system combination, in connection with the Form S4, contain a proxy statement and prospectus with the SEC, which you should read carefully and in its entirety when it becomes available, because it will contain important information.

Dynamics to each machine and their respective directors and officers may be deemed participants in the solicitation of proxies of dynamics and executive officers and their interests in this combination will be described. and their respective directors and officers may be deemed participants in the solicitation of proxies of dynamics of shareholders in connection with business combination about each company's directors and executive officers and their interests in the business combination will be described in the form s4 when it becomes available. What are you guys starting on? What's what how much ether do you guys have right now? So we're anchoring this with a 169,984, which is basically the amount of validators divided by 32 of mine. And we are going from there. Okay. Yeah, I think the press release announced the plan to current prices to be more than 400,000 either.

More than 400,000 either. Is square one, base one number one for you guys? Day zero. And how do you get there? How do you get from the, did you say 169? Okay. Yeah, 169,000. How do you get to 400,000?

Is that net new, like, purchasing coming in? So that's a great question. And I think that this is a key differentiating point. We've seen others say that they own X Ether, but with an asterisk, that that's a in the money call option. And we are not going to be employing in the money call options for our exposure. What is it in the money call option? So basically one buys a call for Ether that it's basically above a certain price at a certain date. and they basically take the cash amount of that delta and they consider that ether exposure.

But because we believe ether is a productive asset and we are going to be generating our alpha, actively managing that for public market investors, in the money call options, leave yield on the table. And if you were to consider this like the Ether ETF is like a stock without having access to a dividend that one enjoys. And so we could employ call options as like proper risk management. But the majority of our strategy, like the well overwhelming, let's call it, 99% of our strategy is around the active ownership and yield generation of, of Ethereum. So some of these other treasury companies are doing this via call options

and you're saying it's going to be like straight purchase of pristine ether in the ether machine. So continue that line of thought then. So you've got 170,000 now or so. How do you get to 400,000 of that clean, pristine eth that you're putting on your balance sheet?

So part of our raise has been in-kind contribution. And part of it has been dollars. And the in-kind contribution is being contributed right now as we speak. The first part of our raise was through a private placement and capital is due today, Friday, July 25th. And that will immediately be staked and be generating ether. And then the dollars that come through our private placement will be used to acquire. spot actual ether, not call options, and to be actively risk managed, generating yield

through staking, restaking, and eventually through defy strategies. I had a question about how other treasuries are doing this. And recently, it was very interesting to me, Tom Lee's outfit, I'm going to forget all the acronyms. David helped me up. BNMR. Is that the one? BNR, yeah. Okay. Yeah, I knew there was a. because it was formerly Bitcoin. Okay, so Tom Lee's outfit, they added another, I want to say, was it 200,000 ETH, 300,000

it's all getting lost, about a billion dollars worth of ETH just this week, okay? They just, you know, bumped up. Now they're above $500,000. We'll show the Strategic ETH Reserve where everyone can kind of track this for the latest. How did they buy or get a billion dollars worth of ETH in one week without the price moving? I mean, what were we, David, up 9% on the week? Yeah, that's right. That's a price move for ants.

I mean, like a billion in purchases and we only move 9%. I don't understand where that's coming from. So I'm not here to talk about other companies. I believe that we're all playing on the same team with team Ethereum. But a way to have exposure to Ethereum without moving the price would be call options. But does that count? Does that count on like the strategic results? strategic reserve treasury website?

It's a derivative. Will it be eth in the future? Well, then if one were to have a call option, they would earn dollars and then would have dollars later to potentially buy ether, to potentially buy more calls. I can't opine for another strategy. But one way to have exposure to Ethereum without necessarily having the price move, but also not being able to participate in the yield generation or really help the network by securing it and validating transactions would be through call options.

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My interpretation of this is that your company is building what you are calling a machine that just produces more ether, hence the ether machine. Talk to us about this name. And then tell us how does one build a machine that produces ether? Let's pop open the hood and tell me what the components look like and how ether comes out the end of it. I think this really dovetails nice to what Andrew was talking about, about the importance of acquiring pristine ETH. To us, ETH is not just a treasury asset.

It's working capital, right? It's kind of the fuel for our reactor, so to speak, is Ethereum itself, right? So, like I like that, we view the ether machine as a machine to produce additional ether. Right. And this is kind of why we have assembled this diverse team of, of deep Ethereum experts to generate the optimal amount of Ethereum on our Ethereum base

or Ethereum Reserve, so to speak, right? So that's why we have folks like Tim Lowe, who is our CTO, who was the initial founder of Consensus Staking, right, has been staking since the very inception of proof of stake, right? Folks like Darius Pritzel, who's been deep in D5 for years, right, being core contributor to the Lichit Protocol.

etc. Right. So we kind of have this team of deep Ethereum experts that's going to be focused full time in-house on generating the optimal amount of ETH

that we can generate out this space, obviously in a risk-adjusted fashion. Yeah, make no mistake, we are Etherheads. And we want to see the Ethereum protocol grow. And to that extent, we want to employ Ethereum as much as,

possible. Back to kind of this call option example, we want to be staking ether so we can secure the network and be a benevolent part of the ecosystem. We want to restake ether so we can use Ethereum's proof of stake security for other middlewares. We want to employ DFI so we can actually be a contributor to the decentralized financial economy. But at the same time, with this public vehicle, we now have the opportunity to explain to Wall Street and Main Street what Ethereum is. So this is going to be the first time, you know, our banking partner is Citibank. It's the largest investment bank on earth. And say what you will about investment banks, this is going to be the first time you're going to see real sell side coverage,

creating reports quarterly. What is Ethereum? What is staking? What is restaking? What are the D5 protocols? we're going to use this opportunity to educate Wall Street, top down, and Main Street bottom up about the power of Ethereum. As I understand it, Ether is this unique asset in comparison to Bitcoin as it relates to being productive. You know, Bitcoin, it's got this great narrative, 21 million units, hard cap, easy to understand. I think that's what's propelled micro strategy to its highs. But as a reserve asset specifically employing this same sort of strategy, Ether is pretty unique, specifically due to its productivity. There's a particular, like, resonance that a productive asset has, a productive store of value reserve asset has for this type

of strategy where we are accessing the capital markets, taking on debt to go and buy a store of value reserve asset to put it on the balance sheet. You know, when you, Bitcoin is not productive. It's inert. Ethereum is highly productive. You can use it inside of Ethereum's defy you can stake it and get a yield you can restake it and add more yield on your yield uh you can i don't know if you guys are doing this but you can put it into aave and access stable coins and get yield there's all these variety of opportunities that ether as a productive asset has which lends itself very well to like having this sort of core business that you need to have in order to pay off the debt that you took on in order to buy more ether how am i over the target here

Andrew, like, is this what you guys are going to do? Are you going to put Ether into Defi? So you nailed it. So, so first and foremost, we need to thank Satoshi for her contribution to the world creating Bitcoin. Bitcoin is the opening act. It is awesome. I was asked on CNBC if I own a Bitcoin and I said, no, I actually own 0.18, which is a little bit of dust. So, so I do own some Bitcoin. I have found that off afterwards. I recall seeing that clip and I recall you saying, why would I own a flip phone when I can own a smartphone is what you said, right?

I'd rather have an iPhone than a landline. So Bitcoin's great, and it can serve its singular use case. Sure. On the Bitcoin blockchain, there's one asset, Bitcoin, and it does one thing, send.

One asset, one cent. Ethereum, conversely, is the infinite machine. We can digitize any asset, a bar of gold, a barrel of oil, a stock bond derivative, a stable coin. And then we can have infinite functionality. Rather than just send, we can create smart contracts that we can just imagine. And basically, any if-then-else statement can be codified on top of Ethereum. So furthermore, and to that point,

where Bitcoin, you need the hardware, real estate, and electricity for proof of work mining, Ethereum has a exponentially more efficient consensus mechanism where all you need is the ether and to be a benevolent actor that's self-interested to earn yield via proof of stake. And so ether has this intrinsic yield that we can employ through staking, restaking, and proof of stake. And so I believe it's a better asset for public market exposure. and furthermore to that, so that's like, let's call it the defy side of the house, and then you talk about the trad-fi side of the house.

We believe that Microstrategie did create from inception a very interesting concept of what we would consider a positive sum game. Bitcoin's a volatile asset, and we can sell the volatility of Bitcoin as Micro Strategy to hedge funds that want to buy volatility and use those proceeds to acquire the asset of Bitcoin as for the shareholders

that want exposure to that asset. And that's why I believe there is a multiple to nab is the ability to access those public debt markets. That, in my opinion, is a positive sum gain. the good news is that ether is double the volatility of Bitcoin. So if you liked Bitcoin as a volatile asset, hedge fund XYZ, you're going to love Ether. If you liked Bitcoin as a buy and hold treasury asset, you'll probably like this one with yield shareholder. So I think that this is just a better mouse trap when compared to the micro strategy Bitcoin buy and hold.

You talked about the intrinsic yield that Ether gets because of how Ethereum works, right? Ethereum, of course, it doesn't have proof of work. The way that Ethereum secures itself is with proof of stake, which means if you hold eth, you do a little bit of work for the network, and then you get the ether inflation that comes out of the network to secure it. And then we don't have to have all the costs of the electricity and all the, all the baggage that comes with proof of work. It's very, very beautiful, very elegant. One of the things that Ethereum has invested in and researched in since its inception in 2015. That's not the only place that Ether gets intrinsic utility and intrinsic demand.

You know, something that pills many people, like me and Ryan specifically, is Ethereum's own internal defy ecosystem, where there are applications like AVE, where Ether is. the primary pristine asset. It is the Bitcoin of its respective ecosystem, right? And so, like, AVE, it has millions of ether in AVE, and people are accessing using ether as collateral, as a store of value inside of Avey, to take on debt in stable coins or other tokens on Ethereum

in order to go be productive. And so, you know, not only does Ethereum itself produce intrinsic yield because of the, the nature of how ether works, but Ethereum has its own defy ecosystem. It has its own on-chain Wall Street that allows Ether to be productive. Are you going to use Defi to get productivity? Tell me about that strategy. Yeah, so I think, as I alluded to earlier, we actually brought on a full-time head of Defi,

who has been a core contributor of protocols like synthetics. So OG Defi, in addition to having an institutional risk management background, right? So I used to work in risk at JPMorgan, Fortress groups like that, right? So it's important to us. But I think one important thing to flag, right, is that we are trying to create an institutional quality vehicle, which kind of runs through everything we've done from day one. And so when you look at this, you know, you'll see us engaging in Defi, but in a measured way, right? You probably won't see us yolowing our whole stack into the latest protocol that dropped over the weekend.

what you're going to see is us helping to credentialize the battle-tested blue-chip D-5 protocols that have functionally had, you know, deck a billion-dollar bug bounties live for years and prove their security over time. I think that's how you're going to see us engage here, and you will see us engage. I think, to my knowledge, we're the only company of our kind that has a dedicated full-time DFI team, right, in-house, as opposed to outsourcing some of this. So for sure you will. Like I said, it'll be measured. And you'll kind of, you, they should be able to point to us as proof to broader Wall Street that a given protocol is trusted and secure and is safe for

institutional adoption. And that's what's awesome about this, right? So we're going to, I think you referenced Abe. I think Avey is a great example of something we would employ, you know, over $50 billion of TBL, been around for five years, has had this bug bounty. It's not the latest, greatest, brand new thing that's yolowing, you know, 100% APYs. And this is where we're going to, when we have our quarterly guidance calls with the public markets, we're going to be educating what is defy. And we're going to explain what is Avey and what is staking and what is restaking? So, like, you know, half of this is the ability.

to explain what Ethereum is institutionally. I use that word explain. Dave and I have often said on bankless since the very early days, the most bullish thing for Ether is to be understood. And this has been part of the challenge that we've seen, at least in traditional finance and Wall Street,

that I was hopeful would get better maybe post-Ethereum ETF, and it got marginally better, but it still is not there, which is you talked about, you know, city being a banker in this, and now we're going to see more sell-side type research,

and actual information about ether the asset, I want you to tell the story, the narrative of ether the asset. So when you try to tell the story of ether, not just Ethereum. Okay, I feel like the Ethereum story has been told a lot of times by a lot of people, smart contract platform,

you know, decentralized, global economy, all of these things. And then people are going, oh, I love Ethereum, the technology. And sometimes in TradFi, they forget about ether the asset, or they think it's like an equity type of play. It's a high-growth tech stock, and they try to value it based on revenue it throws off

and all of these silly things. So what's your message to Wall Street? When you describe ether the asset itself, what is ether? Ether is the commodity to the future of the Internet. Ether has multiple use cases and multiple ways to be valued. Ether is the fuel for every computational step necessary to process a transaction on the future of the Internet.

Ether generates yield intrinsically through staking, restaking, and participation in the decentralized financial economy. And Ethereum has escape velocity where 90% of the high-quantrifice, quality liquid assets on blockchains are settled to Ethereum. And each one of those requires a micro payment of ether. EIP 1559 burns ether on layer one transactions. EIP 4844 essentially burns ether through layer two blob transactions. So we have this burning mechanism. and the finite conversation versus a dynamic supply in our experience, that is a feature and not a buck.

And when we employ EIP 1559 for burning at layer one and EIP 4844 for blobs that basically burn from layer two to layer one, we are working with a dynamic economy. the world is way too sophisticated for something static, like a finite supply. So what are we dealing with here? Because, you know, in TradFi, they like to put things in categories. And you use the word commodity, which brings to mind things like oil, things even like a gold, which has sort of been viewed as a monetary store, a value type commodity. And of course, Bitcoin has really taken off under the moniker of, you know, digital gold.

What is either the asset, if you're to categorize it? because some in Tradfire are still putting it in the, oh, it's like Amazon stock or something, or it's like Open AI stock or something like this. What is, is it? It's a digital commodity. It's a CFTC accepted digital commodity. Okay. And it's new.

Is it a reserve asset? Is it a store of value? Is it a currency? It can be both. I mean, I think it can be all of the above. Why should somebody put it on their treasury then? Is the reason because number goes up? Is it number go up technology as well?

I think if someone wants exposure to how the future of the internet is going to work, the best beta on all of that is the acquisition of ether. How close is Wall Street to understanding what you just said? What's kind of the delta? And is that delta the opportunity? Yeah. We're getting there. We're getting there.

Give us four quarters of quarterly reporting and education. And I welcome you all to join our quarterly guidance when we are. a public company because that is our job. Our job, make no mistake, is to explain this to institutions. What is Ethereum? What is Ether? What is Staking? What is restaking?

What is Defy? What are the blue chip best benevolent actors? What are the best use cases? There is no Michael Saylor of Ethereum because Ethereum and its use cases and its utility should be the story. What's the size of this story? So, like, is this as big as gold? What's the size of the,

what's the size of the Tam of the Internet? I don't know. What is the size of the Tam of the Internet? We've been asked not to make specific price predictions, but I think both of us have published extremely bullish price predictions in the past at orders of magnitude above where we are. So you guys can't make price predictions?

Is that, is that, Is that yet? Because Michael Saylor makes price predictions, let me tell you. The ETH Digital Oil piece, I helped co-author with Tim Lowe and the good gentlemen and ladies at Ethereumize. And we've pointed people to that. I love the piece that Consensus recently released, both Dave and My alma mater, on just showing the escape velocity and the gravitational pull. of high quality liquid assets

where basically there's something like $250 billion of high quality liquid assets on blockchains and over 90% of that's going on to Ethereum. And the best analogy I can make is 90% of searches happen on Google and Yahoo gets 1% and Bing gets 1% and Ask Jeeves gets 1%. And I'd ask you guys,

when's the last time you've used Bing, Yahoo, or Ask Jeeves versus Google? And I think that that is becoming more and more apparent that Ethereum is the only blockchain that is decentralized enough, has enough client differentiation to be a global substrate where nation states, institutions, and people can trustlessly interact with each other. Is this a bigger story, bigger opportunity than Bitcoin? For sure. I mean, Bitcoin's Tam, if we want to be generous, is digital gold, which is one use is send and one asset, Bitcoin. Ethereum can generate any asset and can codify any function. So recently BlackRock filed a new S1 for their ETFs in order to make staking happen inside of the ETFs. So let's assume, fast forward to the future.

Let's assume that ether ETS are all staked ETS, and so you can get the yield of Ethereum staking inside of the ETF. Why do we, in that world, do we need the ether machine? Because then the ETS are just doing it. Great question. What I would point you to as a proxy are the European ETPs. If there's, let's call it a billion euros in a European ETP, they are staking back of the napkin, 50%.

So why aren't they staking at full capacity? And let's say the floor risk-free, just vanilla staking is 3% yield. So on their billion euros in an ETP, they're staking at 50% capacity. And so they're really earning approximately, let's just use the example number of 3% yield, they're really only earning 1.5% on the total amount of money. And the reason why is that the Ethereum, Protocol is built for decentralization. And the brilliant researchers at the Ethereum Foundation don't really care about, you know, what Trad V financial wrapper Ethereum can go in.

They care about the scalability, robustness, and decentralization of Ethereum. And to that point, there is a technological nuance that is extremely important to understand. It's called the withdrawal queue. So today, if we're one wanted to withdraw their ether, it would happen in a few days. If God forbid, a bad black swan event happens on earth and the world goes risk off and everyone wanted to unstake their ether at the same time, let's call it 50% unstaking, 90% on staking. That withdrawal queue would go from a couple days to six months or a year. ETFs have 24-hour redemption. requirements. ETPs have 24-hour redemption requirements. So what's what we foresee is what what we're

already seeing, let's just call it right now, because we can, the ETFs have zero staking, but the ETPs are staking at 50%. And they're only doing, let's call it, floor vanilla staking. They're not able to restake. They're not able to participate in defy. And, And we don't foresee a world where the ETFs are going to be able to exceed similar yield. And, you know, a devil's advocate would be, well, what about a liquid staking token? If you guys have been watching, because we're the etherheads and we've been, you know, able to understand the Tradfi part, but we know Ethereum as well as anybody else. the liquid staking token steeped. So you think that BlackRock and Fidelity

is going to be able to use a liquid staking token that's just depegged? Nope. And furthermore, using this example, the billion euros staking 50% capacity only generating vanilla floor yield versus our vehicle that doesn't have the 24-hour redemptions that's able to participate in the vanilla yield that's able to participate in restaking, that's able to participate in defy.

That's why we believe this is the right vehicle for public market participants to access the full suite of capabilities that Ethereum is able to generate. Maybe just to add on to that, right? I think as you guys well know and have articulated over the years, ETH is a very dynamic asset, more dynamic than some other ones that you might just sit on and hold that are appropriate for a passive wrapper. Properly capitalizing on Ethereum requires active use and management to maximize on that. That doesn't lend itself to a passive wrapper like an ETF. It requires the kind of active management you can really only get in a company structure if you're going to

provide that some public markets. That's why we think this is the best way for public market investors to own Ethereum over the medium to long term, right, which is why we set this up with an eye towards the medium term, but the Nobo structure is Andrew Flagg, right? We're trying to set this up to become a pillar not just of the Ethereum ecosystem, but of Wall Street in the medium term, right? That's what we're doing here, because this is the way for those investors to own this asset. Yeah, that de novo structure, I think that comes across in the ticker, right? So some of the other ETH Treasury companies that we've seen, they've been, you know, things with a B in them, that means they were formerly a Bitcoin mining type company or other, you know, things that are not related to crypto at all, like, you know, gaming companies. That's where SPEC comes from. What's the ticker for the ether machine? It's pretty clean, as I recall. So the ticker right now, because to your point, I looked at this from kind of first principles, and I thought, well,

Well, if I want pureplay exposure to Ethereum and to actively manage a vehicle to be able to access the public equity and debt markets, I don't want to be operating or working on another business that has preexisting operations, preexisting governance, preexisting liabilities. I wanted something clean. So that's why we created a de novo entity, so a brand new LLC that I anchored with my own capital because I'm going to lead by example and I'm not going to let anyone do something that I wouldn't do myself. And I'm patient zero and I need to be maniacally focused on ether accretion per share. And so that is kind of the spirit of why we kind of differentiated from not doing a reverse takeover of some microcapshell company. And the ticker currently is DYNX and will be transitioning upon SEC blessing of the merger of the two businesses, DYNX and the Ether Reserve once we create the Ether machine. will be ETHM. ETHM.

But right now, on NASDAQ, this is trading under DYNX. And then let's call it three, four months once the, it's just like the SEC process where we then run our operating business under the purview of the ether machine. But currently it's Dynamics, which is the blank check company that we're merging with. Imagine a world where traditional finance meets the power of blockchain seamlessly. That's what Mantle is pioneering with blockchain for banking, a revolutionary new category at the intersection of TradFi and Web3. At the heart is U.R, the world's first money app built fully on chain. It gives you a Swiss I-Ban account, blending fiatur currencies like the Euro, the Swiss franc, the United States dollar, or the Rimbi, with crypto, all in one place.

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including the United States. Check its terms for more information. Andrew, I got to say it's good to have your voice back in Ethereum. You're back in the spotlight. And I think that maybe you could tell us a little bit about that because I think that a lot of early Ethereum folks will remember your work at Consensus, will remember the Enterprise Ethereum Alliance in some of those kind of early days and getting that off the ground. Maybe they just assumed, you know, Andrew's passive.

He's in the background now. I mean, maybe some people assumed you were retired or that you were just like maybe no longer interested in Ether. And then next up, we see you're launching a massive ETH treasury with a good chunk of your own ETH stake. You're depositing this. and now you're on CNBC. Did you ever leave or like, did you, like, why come back?

Why step back into the light? So a few reasons. So first and foremost, you're right. I went to the first ever Ethereum meetup, like a complete nerd in Manhattan, literally meetup.com and was with Aaron Wright, founder of the Lao, Joe Lubin, founder of consensus, Sam Cassett, who was the chief strategy officer of consensus, like the OOGs. of day zero pre-Eetherium, pre-Genesis block. I ran around Asia with Vitalik explaining what is Ethereum to anybody who would listen.

2014, 2015, 2016. The first time Ether crossed $1, I put a permission version of Ethereum onto Microsoft Azure and created blockchain as a service. I helped create the Enterprise Ethereum Alliance, which was the largest open source standards body focused on blockchain technology on Earth. I helped build consensus as global business development,

go to market strategy. I have been staking because I thought Ether was a commodity. And so I created a commodity pool operator and commodity trading advisor named Dharma, which is an acronym for digital asset risk management advisors. and have been securing the Ethereum network from day zero of proof of stake. And you may not have heard from me during the Gensler era because there was no upside in speaking.

But every minute of every day since Proof of Steak, I have been institutionally managing and securing the Ethereum network. And now that we have a positive regulatory tailwind where we have acts like the Genius Act, which basically gave stablecoin clarity and the largest beneficiary of the Genius Act is Ethereum because the majority of stable coins settle to Ethereum. And now it's time to get loud again. And it's time to get this from proof of concept into production.

The ZKEVM is on route. It's going to improve speed, privacy, confidentiality. L2s are cooking really well. We're seeing the fast actors like Coinbase with base, Robin Hood with their L2, cracking with ink, creating their L2s that are all going to settle to Ethereum layer one. All the institutions, bold bracket banks are going to have their own L2. And it's going to settle to Ethereum.

and we're here to usher that conversation along and educate Wall Street top-down, Main Street bottom-up. Andrew, you mentioned something that makes me want to go down a quick side quest about not wanting to be loud during the Gensler administration. There's a debate in CryptoWorld about how specifically the Gensler SEC administration

targeted Ethereum versus crypto broadly. 100%. They gave Bitcoin the green light, and then everything else they kind of targeted. And there's a debate as to whether or not, you know, Ethereum was specifically hazed by the Gensler administration versus Cryptobrodly. So there's one argument where, well, no, the Gensler administration, they labeled Solana a security, they labeled, you know, other tokens a security. They never specifically labeled Ethereum security, but they treated it as such.

And so saying that the Gensler administration specifically targeted the ecosystem is just wrong because literally they labeled Solana as Security. Then the other, the other, that's the, that's one side of the debate. The other side of the debate is, well, actually, they labeled Ethereum a security in secret and really pointed all their firepower at the Ethereum ecosystem specifically. And, you know, people like, builder, Ethereum builders like Danny Ryan specifically got SEC subpoenas. And so yes, while they targeted the crypto ecosystem broadly, it was Ethereum that was really what was in the crosshairs of the Gensler administration. Provide your perspective on that conversation for me.

So I believe that Ethereum got most of the headwinds and Ethereum's position to get most of the tailwinds. Because, you know, again, let's call it versus Bitcoin. Bitcoin has one asset, Bitcoin on it, and one function, send. Where Ethereum's going to have infinite assets and infinite functionality. And Ethereum is experiencing these parallel dynamics. similar to Google with search where 90% of assets are being tokenized to settle on top of Ethereum. Whether they specifically targeted Ethereum or not, I mean, what did they get right?

They missed FTX. They missed Celsius. With their real job is to, you know, they emboldened meme coins, that majority of the meme coins are on Solana. So I think those are three strikes you're out if you're really talking about, you know, protection, protecting the U.S. stakeholders. So, you know, I'd rather move forward. Hester Pierce is my hero. And let's keep moving forward. So, Andrew, you mentioned that you never left, but at some level you're back in a loud way, okay?

And you're back to tell the story of ether, the asset in the entity of the ether machine. The question is, how loud are you actually going to be? Michael Saylor's pretty damn loud. Are you going to out loud someone like that? And then second to that is, if we got, how loud are you going to be? I also want to know, how are you going to be loud? Okay. So where are you going to go?

Like most of crypto already knows about ether the asset in order for, the ether machine to be successful at some level, you have to take that to the rest of the world, take that to Tradify. Sure. So I'm going to let the use cases of Ethereum speak for themselves. I don't want to be the Michael Saylor of Ethereum by any means. And I think Michael Saylor is amazing. But the problem is he's got a singular asset that's got a singular function. And there's only so much you can say about holding Bitcoin and sending it with Ethereum. the good news is we can talk about the productivity of the asset, the yield generation of the asset, the economy that's being built on top of it, and we can make the Ethereum ecosystem, the stars.

So where we're going to differentiate is we're going to be highlighting the difference in that Ethereum is a productive asset and a productive economy and letting the use cases speak for themselves. And to where we're going to be having that conversation, you're right. You're not going to necessarily see me at, even though you probably will see me because I love crypto events, but I probably won't be best suited for the ecosystem there. I've got to go where people need to learn about Ethereum. So there's probably going to be an institutional educational roadshow. and then Main Street non-crypto, where we're educating people that are not as experienced,

but I love going to DevCon, I love going to ETHDember, I love going to ETHC in France, and it's fun for me to see my friends and to see what's being built. So you're not going to keep me away from the OG crypto conferences. Let me just build on that a second. So there's also a reason there's two of us on this podcast, not just one.

And you'll likely hear from more of the team in the future. We're trying to build an institution, not a cult of personality, right? We want to build something that is going to endure for the long term like Ethereum itself. Right. That's why the focus is on the name, the ether machine, right? We spend a lot of time on branding. We care about kind of building a broad and deep institution. here to drive the whole ecosystem forward, right? And while Andrew is truly incredible and has a

fascinating story, right, I think we hope to highlight many more voices, not even just the two on this call. Yeah, totally. I think that's an excellent point. And to that point, to kind of further elaborate, you're going to get probably Ethereum and its use cases from me. You're going to probably get corporate strategy with respect to Ethereum from Dave as a former McKinsey consultant. who basically did corporate strategy for some of the largest Fortune 500s on Earth, you're going to get Ethereum and its staking capabilities from Tim Lowe,

who was the founder of Consensus Staking Vehicle, built the institutional staking vehicle for Dharma. You're going to get Ethereum and its defy capabilities from Darius Pritchell, CFA, core contributor to synthetics, core to consensus defy ecosystem you're going to get

Ethereum and public company excellence from a new face on the block. His name is Jonathan Cristodoro. He is a classic underachiever. Cornell, Wharton, Harvard, Marine Corps, Morgan

Stanley Investment Banking, worked for Steve Cohen, worked for Carl Icon, sat on a dozen corporate board, including Xerox, Dell, Lyft, eBay, still sits on the board of PayPal. And basically, he is going to be our lead on corporate governance and excellence, because this is a public company, and we'll be explaining how Ethereum works in this context. And we have another surprise who's going to be joining us on growth and marketing,

who's going to be marketing Ethereum from Wall Street to Main Street, from the Hague to D.C. And basically explaining some of the non-financial use cases. So to Dave's point, the Ether machine story is going to be multifaceted with multi-persona and multidirectional. But you're playing for number one slot here on this board. Always play to win. Absolutely. Yeah. So to build on it, I would say our real target is we want to acquire as much of the network as we can without threatening the decentralization and security of the network.

Right. So internally, we've actually been kicking around numbers of about 10%, obviously. But our North Star here is really, over the medium term, to be clear, over the next five, ten years. Because to us, this is a long-term game. Like said, our North Star is to acquire as much as we can without threatening the network itself. Can I ask a question about that just in general? So without threatening the network, so this is the bankless podcast, right? And so your bankless means self-custy your own keys, defile, all the things. We're really excited to see the capital from traditional finance enter the space. It's the world's

largest capital market. It's only a matter of time, had to happen. We were going to integrate all of these things. But is there any worry as we get a larger percentage of ether inside of ETFs and inside of treasury companies that we lose some of the decentralization in general. I mean, we're at low percentage points now, but you look at the Bitcoin network, that's kind of where it's headed. No one's even transacting on Bitcoin anymore. The fees are low because no one's doing it. People think they own Bitcoin when they own like a micro strategy. And that's not the same as owning actual Bitcoin. So is there a concern if we get too much in these treasury entities too much in these

ETFs that we sort of lose some of the decentralization properties that that made Ethereum and makes Ethereum what it is? I don't think so because I actually think that the transactional layer will be the layer twos and I think that Ethereum through its blob

architecture inspired by EIP 4844 really encourages the application layer to be developed on you know, thousands, potentially millions of layer twos that are customizable. So I actually think that we will be good participants within the Ethereum ecosystem and we'll always have that North Star that this should be a decentralized, robust protocol

and our contributions to it will never be in a place where it can harm the decentralization. Yeah, and I think just to build on that, right, a large part of the value here, as Andrew alluded to, is using Ethereum itself, right? So we aren't just a buy and hold structure. We're going to be using the tokens to secure the network, to participate in the network. We will be working to help grow the network, right?

This isn't a passive. The business model is ETH. Exactly. Right. And look, I think, look, we think one of the most valuable aspects of Ethereum is its credible neutrality, is its decentralization. That is at its end of the day, at the end of the day, core to the value prop here. And obviously, we won't do anything to undermine that in any way.

But with that guardrail in place, yes, I think, you know, our aim is to get as big as we think we responsibly can. Andrew, I'd love for you to weigh in on this because you've been around Ethereum from the very beginning. You've seen kind of the roadmap evolve. Back before, there was even the concept of really provisive. of steak in the distant future. Now it's here, obviously, that happened a while ago. David and I have been having this ongoing discussion where looking at the price performance of the past,

I don't know, two to three years for Ether, and it's pretty meager, at least compared to what we think it can do. It's been lagging Bitcoin, for instance. Salana's had a good run, a couple of other alt-coin ecosystems, but Ether has been kind of flat. You know, we're hanging out in the 3,000s. My take on that is like, oh, it's because people don't understand eat through the asset. It's a narrative-type problem, and that's why partially I'm excited about

treasuries. David agrees with me. I think, David, you agree with me. But he also would add, and I also agree with him that, okay, a big problem, too, has been the roadmap itself and the focus. And we did these layer twos, but we forgot to integrate them all together, right? So it feels fragmented. We haven't economically integrated all of these things. And so maybe in the future, and the EF hasn't shipped the way it should be shipping. I guess my question to you is like, when you look at the Ethereum roadmap right now, 2025, what do you see?

Are you bullish? Are you optimistic? Do you still feel like we need some changes or pivots? So I think there are a confluence of issues that I think have been ameliorated and we're seeing positive progress. So first and foremost, I'll just group it. the Gensler era prevented the marketing of Ethereum.

People like me shut up, people like consensus shut up, you know, no one was going out, you know, screaming from the mountains what Ethereum is, why it is what it is. And it also thwarted use cases. So we weren't able to see Ethereum's capability where those headwinds have now turned to tailwinds where the largest benefactor or excuse me beneficiary of the Genius Act is Ethereum because the majority of the stable coins happen on Ethereum. So I think there's the political aspect. Then what I would say is super important is the layer two architecture. So EIP 4844, you know, dictated a lot around blob pricing and it's cheap, right? It's it's super duper cheap. Like coin

Coinbase owes the Ethereum Foundation a large donation, in my opinion, because of how cheap bases and how much is settled to Ethereum Layer 1. But jokes aside there, I think that that's the right architecture. And I would kind of analogize it to if you used an Uber 10 years ago to go five miles, it cost X. And if you use the same Uber to go five miles, it costs two, three X now. Basically, Uber became ubiquitous and became the majority of used ride sharing app and has raised prices. And as the Ethereum layer one congestion increases and more L2's anchor to Ethereum, I believe that we're going to see price per transaction, gas burn, whether that's layer one and layer two evolve. and and frankly increase in price. Third, the EF, I can't say that like they haven't shipped like they should have because frankly, they have a, you know, let's call it $400 billion network that's in flight and they've changed the engine while in flight. Like proof of stake was amazing transition.

And I have just welcomed all of the evolution of the Ethereum Foundation over the last six months. I am extremely bullish on the direction they're going. It seems like realignment was necessary. And I think that, you know, that happens within organizations. And it seems to me as though they have taken that initiative very seriously. And I'm, I wouldn't have done this if I didn't think Ethereum has. is the only true blockchain to be the substrate of the next generation of the internet.

Andrew, Dave, as we start to bring this to a close, you know, I've got one thing in my mind. You know, every cycle we've had in crypto, you guys have been through several of these. Seems to have a theme. So last time for Ethereum, it felt like it was defy. Like, defy just kind of broke out 2020. And then we got NFTs after that, 2021. There's some new use cases there. Looking for a theme for this cycle that we're in, this, this bull.

cycle. And to me, it seems like what might be emerging is the theme of institutional. It's the institutional theme. We saw Bitcoin take a run just on the institutional bid, right? And it's up into the trillions of dollars. Now, ether is not in the trillions yet, but maybe it has the potential to get there. And I think it does. Also, we're seeing real world assets. We're seeing the tokenization of stocks and treasuries. And we've never seen that before. We're seeing stable coins. That seems like an institutional moment where all the banks are like, we need an Ethereum strategy, essentially. We need a stable coin strategy. And so question in my mind, or maybe the bull case here, is like, if this theme is of this cycle is institution, what is the next institutional grade asset?

The first was Bitcoin quite clearly. That's how it got into the trillions. Is the next ether? Or is it a long tail of all sorts of different assets? Am I onto something here? What do you think the theme of the cycle is? Yeah, maybe I'll start there. Look, I think we very much think the theme of this cycle is institutional adoption, right? That's why we're doing this right now. I think these concepts aren't necessarily novel. I believe Andrew was first kicking around the idea of an staff with some members of our team, our team now in 2020. Okay. But the reason for the push right now is because this is the vehicle for the moment, right? This is the time of institutional adoption, and we're trying to drive that in the first class way. Okay. And we're seeing it not just in the

rise in some of these vehicles like the Ether machine or like the ETFs, but also in real adoption out of these banks, right? So, when we, part of trying to build this institution of quality vehicle is that we partner with a Blue Chip Investment Bank, Bullsbrack Investment Bank, to take this out, right? Now I have to get signed off at the very top of that institution, right? We're the only treasury vehicle with that kind of support. And by the way, they're only doing it in Ethereum, not other places because they want to explore building on Ethereum, over the next year or two, right? So I think, you know, what we're seeing is it's taken some time to get the wrappers up

to allow Wall Street to own part of the Ethereum network, just as we have for years. But the next step after that is going to be getting those use cases online, which I think we're really going to start to see over the next 12th, 18 months. We only got regulatory clarity out of D.C. in the last couple of weeks, right? And these large institutions can't build on Ethereum without the regulatory clarity

they've only just gotten. And now they can actually start to put into production some of the use cases we've been talking about for the better part of a decade. Right. And so I actually think this institutional cycle is really just getting going. And I'd add to that, you know,

the bold brackets are starting to engage in defy. They're taking a conservative approach and one of the things they're looking for are clean blocks that have no other transactions to any other unknown entities, including unknown validators. They're also looking for a kind of timely inclusion of these blocks. And if they're going to avoid the public block building marketplace, then the only option is a direct agreement with a validator that has a decent proportion of the network. We could be that validator. We are built to be that validator. So we will be working top down institutionally

and bottoms up for Main Street for the benefit of Ethereum and its decentralization properties. I got to say, Andrew, it's true that you never left, but I got to say it's great to have you back in the spotlight. I think I'm talking for, I'm speaking for a number of people in the Ethereum ecosystem. It's just really great to have you back and doing what you're doing in such an active way. and Dave, it's been great to meet you. What can folks expect to see from the Ether Machine next? The active acquisition and management of Ether to compound Ether and to serve as a benevolent actor in the Ethereum community. Bottoms up, Main Street, top-down institution, we're here to help.

When you say active acquisition, does that mean Spot Order Book, Perkins? purchasing of ether with cash money. That and OTC. Okay, cool. Amazing. Guys, we'll have to end it there. This has been an exciting episode. Dave, Andrew, thank you so much for joining us today. Thank you, guys. Bankless listener, got to let you know, of course, you know crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.