Bankless - Why Ethereum MUST Change Its Monetary Policy | Sam Jernigan and Jerome de Tychey

Episode Date: August 20, 2026

Ethereum may be paying too much to secure itself, and the consequences could extend far beyond a little extra ETH issuance. Jerome de Tychey, co-author of EIP-8363, and Sam Jernigan join David Hoffman to make the case for stake targeting, a proposal designed to stop Ethereum’s staking ratio from climbing indefinitely. They debate what happens if more than half of ETH becomes staked, whether today’s issuance threatens credible neutrality, why staking may be crowding out DeFi, what lower rewards could mean for ETH’s monetary premium, and whether solo stakers and institutional holders ultimately win or lose from the change. Subscribe for more conversations on Ethereum’s monetary policy and future. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔓 NEAR | TRADE CONFIDENTIALLY, GET 20% BACK https://bankless.cc/near-pod 🔑 BITKEY | GET 10% OFF USE CODE: BANKLESS | #bitkeypartner https://bankless.cc/bitkey 📊 BITGET | TOKENIZED STOCKS 2.0 https://bankless.cc/bitget-stocks 🎯 THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless 👑 BANKLESS CONTENT MCP https://www.bankless.com/premium --- TIMESTAMPS 0:00 Why Ethereum Needs Stake Targeting 4:27 What Actually Breaks With More ETH Staked? 9:54 The 50% Social Backstop 18:24 Ethereum’s Protocol vs. Its DeFi Economy 21:30 Is Staking Crowding Out DeFi? 26:19 Dilution, Subsidies, and ETH Price 35:46 Would Lower Rewards Hurt or Help DeFi? 49:48 What About Tom Lee and Institutional ETH Holders? 57:02 Does This Hurt Solo Stakers? 1:09:01 Why EIP-8363 Is So Contentious 1:18:10 The Final Case for Changing Issuance --- RESOURCES Jerome de Tychey https://x.com/jdetychey Sam Jernigan https://x.com/macrosam --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Bankless Nation, the debate around the EIP that changes East's issuance policy is not over. On this episode, I have Jerome Day to say, founder of the ECC conference and also one of the core authors and proponents behind EIP 8361, the stake targeting EIP. Jerome, welcome to bankless. Thank you so much for having me. I'm also a solo staker, and the official number is 8363 now. So if you're looking for the EAPE. 8663. Yeah.

Also joining Jerome is Sam. Sam Dernigan, he is the Eith Maxi of Wall Street, the CIO of Lafayette Macro and CEO of Lafayette Digital Acquisition Corps. Probably one of the louder proponents on Twitter about stake targeting. Sam, welcome back to Bankless. Nice to be back. Jerome, let me just start with you, since you're the core author and you really introduced this EIP into the zeitgeist and has caused much of a gnashing of teeth and debates in the Ethereum community. what is the problem that we are trying to solve here? Why is this EIP important and urgent?

Yeah. So there's many, many sub questions in what you just asked. So let me try to be as short as possible. First, it's not an old problem. We knew about this issue for a few years now. Actually, since before even the launch of the proof of stake, we knew that the curve that we were using would probably have to be recalibrated at some point.

The debate, the initial debate really started in late 2023 and had a first intense debate in early 2024, and then it was rekindled in late 2025. And now is the time to have this discussion again, mainly because at the current rate of entry of new EFAT stake, we are climbing away towards more than 50% of if at stake, very likely in 2028. I hope the time will tell and prove me wrong,

but apparently on the current trend is clearly where we are going. And the problem with having so much EF at stake is that it's detrimental to our security and it's also detrimental to EVE the asset itself. So let's take a small step back, the current curve that is rewarding the body details for securing the network.

is very simply put, the more EF at stake, the more EF is printed. There is an incentive to stake that never really switches off. Even at 100% of EF at stake, which would be like the limit, max limit, of course, like 100% of EF at stake, we are about 1.5% yield. There's potentially no equilibrium possible for the staking market. Like all EF will want to go at stake at some point. and for the silent majority, the EVE that are not yet at stake,

well, they are paying for staking fruit dilution. So that's what we want to address, and this EIP has the conclusion of many years of research and also of the urgency of making this change now. Otherwise, the more we wait, the more painful it will be. So we are introducing an off-street, a guarantee that the market will find an equilibrium, a burn that grows with the staking ratio,

the more if at stake, the more a portion of the reward are burned. So the rewards will taper to zero at around half of the if at stake. And in practice, the market will, of course, stop well before that. Actually, where the staking market will finance it's an equilibrium. And whenever the participation ends up being low, which is very unlikely, the curve still pays very well. So it guarantees that we have a good security for the network. So it's also sitting on research like minimum viable issuance,

making sure that we are not overpaying for our security. And something I like to stress from the get-go is that we have a history of not overpaying for our security and making changes in our monetary policy oftentimes at Ethereum, but always in the same direction downwards, like issuing less, diluting less our holders. And that's precisely why we're having this discussion right now. I think a lot of what you said, Jerome, checks out to me and also at the same time,

in order to change the monetary policy around Ether, you need to have overwhelming evidence that this is not just something in pursuit of a better outcome, but something like meaningfully catastrophic if we do not do this. And so maybe Sam, I'll throw this to you about like, you know, Some of the things that Jerome says is like, you know, like we're approaching 100% of eatstaked. You know, in vanilla, eth holders are paying with dilution. 50, yeah. But like, but the incentive, as you said, the incentives always goes and approaches 100% of total stake.

I think I need to hear the answer of just like, so what? Like, okay, we hit 100% eat steak in the worst case scenario. You know, the worst case scenario, eat holders are losing 2.5% a, nominally on their eth in the year. So what? Like is that really that bad? Like how would you argue that this EIP is addressing a very large issue?

Right. Thank you again for having me and including me. I do think this is a very important topic. And before we even really get to the monetary case for it or the, you know, go as far as to say 100%, you know, the curve stops. or goes to zero at 50% for a reason. And that's because we have to maintain above

above any other priority, Ethereum's credible neutrality. And when you cross above that threshold, and arguably before, unfortunately, and I think that's something we should get into. I mean, arguably, the risk to Ethereum's credible neutrality is well short of 50%. But we feel like that is the absolute

firewall. Once you go past that point, you have more basically that is staked into the system, into the consensus mechanism, than outside of it. And in the event of, say, a catastrophic slashing

or a smart contract bug or a hack, you know, I think a lot of people and a lot of debate seems to be coming from or focused on the LSTs, but you could argue that something like a Coinbase might be even a bigger kind of potential risk. And even today, you know, I would ask you, you know, if, let's say, I think Coinbase's market share for staking is probably 20 or 30 percent if you

include kind of all the buckets there. And if, you know, if you have, let's say, you know, 75, 80, 90 percent of the validator set that is staked and they have 30 percent of all ETH, or a 30% market share, right, of that, of that, of the validator set. And if they were slashed or if they were hacked or there was a smart contract bug of some sort, my guess is that there would be significant calls, right, to roll back that event, similar to what we saw with the Dow hack back in Ethereum's earliest days. And I think that it should be a very cautionary tale, what just happened. with Kelpdow, this diminuously small pool of ETH.

Again, it was an LST, but it could have just as well been a, some sort of a pool centralized operator as compared to an LST. And I will just tell you, I was very surprised to hear large players in our space that viewed that as a systemic event for the lending protocol that was involved in that incident. And I was telling people that were asking me at the time,

no, this is not a systemic event that the total amount of ETH in that lending protocol is less than 5% of all ETH. That's not a material amount. And yet people thought it was a systemic amount. And so that is not, I mean, it's a insignificant microcosm of the type of risks that you're opening up the core consensus mechanism to, if you're talking about going up to 50%.

We're at roughly 33%, I believe now. If you're talking about going above 50%, well, it's kind of done, right? You have moral hazard has consumed the chain at any point above, in my opinion. Again, probably before, unfortunately, but as a firewall, 50%. Once you go above that point,

you have more eth that is in the system than an outside. And when it comes to, you know, the ultimate decision is the social layer, right? And at the end of the day, if you have more capital that's in the system and subject to moral hazard than outside, and a decision comes down to whether or not to roll back that event, right, to undo it, well, I think unfortunately it would likely be a decision that meaningfully hurts

Ethereum's credible neutrality. I think that that's just the one kind of very obvious point. Yeah, there's a ton of moral hazard coming from up of a big pandarus box where lots of things that intertwined between the consensus layer and the execution layer.

Staking the everybody that mingle into defy, they make the case for are we going to roll this back or are we going to change this, a much harder decision to make. Beyond the more purely incredibly critical neutrality problems,

like at what stage do we consider that the network has been captured and we start to censor transaction and so on. But if we look at 34%, what concretely breaks at 50, 55, 60% that is not really broken at 34. Very simply put,

it's our last line of defense. the ultimate backstop for Ethereum is on code. It's the capacity to have social coordination backed by unstaked if and past the half of the supply being steak, that reserve is just a minority. And the drift just compounds, of course, because the more if is at stake, the more everyone else gets diluted,

the more people feel forced to stake just to keep up. And raw if gets displaced by staking tokens and wrappers and sticking derivatives. And it's just replacing the working money, in the whole system. But here is something I'd like to underline here. What really breaks is also our ability to fix it. The correlation itself gets more painful

with every point of ratio that is climbing up. So fixing the issue when we have 20% of EF at stake is much easier than fixing it when we are at 34. So I wish we had those discussions like four years ago. And it's going to be meaningfully harder if we have this discussion in two years from now. So today we can run a transition that starts at today's yield,

give our take, and gives everyone roughly two years to adapt, and that's a gentle path that exists now and will likely not exist later. Also, we're not even talking about Lean and the roadmap for Ethereum to change. It's duty for the validators and so on. That will imply also a change in the issuance.

So we have the opportunity right now, now to do this change, but also to make sure that we pick a new issuance and a new monetary policy that we can stick to for the next five to ten years, at least. So I think, I think, I think, German hit on a couple of points. I'd like to just elaborate, one on this issue of capture. I will not support and Wall Street will not build on a chain that has been captured by a cartel of small interests. And so maintaining maintaining Ethereum's credible neutrality by preventing the valider set

from being captured by a small group of actors is absolutely critical. We're wasting our time here if we genuinely, if we allow that to happen. I think that so that is, that's absolutely paramount, whether it's censoring transactions or, again, simply, you know,

JP Morgan or Wells Fargo or Bank of America are not going to build on a chain that has been captured by a small group of people. So this is what uniquely separates Ethereum from every other proof of stake chain. I really only took on this direction in my career and my life

with the explicit understanding that Ethereum was committed to capping the validator set it somewhere between, I mean, Vatolica said this low as 15%. You know, I think now we're basically allowing it to go all the way to 50. I think Justin for a very long time and most of the Dancredit

and many of the other the original designers of proof of stake always had somewhere in the range of 20 to 30%. We can and should talk about why we're in this situation with the current issuance curve

which all of the designers of the proof of stake mechanism for Ethereum believe was a mistake that it was always meant to prevent the validator set from growing much larger again than this kind of 30%

or even, I think they used to say 30 million, but that was when the total amount of ETH was closer to 100 million rather than where it is today. But it was always supposed to cap the validator set. And as Jerome alluded to, and I think that this is actually something we should talk about because, you know, I think while the researchers and a lot of the protocol teams maybe understand, you know,

the client teams understand that the lean roadmap implies much less issuance is required. I do not think many people outside of that very small group of people understand that. And certainly that has not been something that you've heard the opponents of the issuance change acknowledge. So I think that that's worth maybe even drilling on a little bit further because this is going to happen either. This is going to have to happen either way. I don't think it will happen if we don't stop. it now. If we can't, and this, by the way, this transition period is already far too long for me.

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There is a link in the show notes. And once you become a bankless premium member, you can hop into the bankless Discord and let me know how you like it. I see Ethereum stuck between trying to maximize two desires, both of which I think are are noble. One side is, I think, the side that you guys agree with, which the philosophy of the Ethereum Protocol is one of radical self-sovereignty, radical self-reliance. The protocol has no dependencies. That's the whole point. It will never be owned or operated by a single cartel, to use your words, Sam, or a small group of people who can kind of control the influence. And

the Ethereum Protocol has always bent towards removing intermediaries, removing dependents, being a multi-client system. Everything about Ethereum is, you know, radical self-sovereignty 100% uptime in every single respect. And I see your guys' arguments as to how this is congruous with that. That's one side of a polarity.

The other side of the polarity is Ethereum has a defy ecosystem. It has a private market on the other side. And the private market can solve a lot of problems. And, you know, on one side, you might call them like a, cartel of people, you know, co-opting the protocol. But on the other side, you see the private market being efficient and solving problems. And so, you know, one of the arguments is that this EIP

preserves the value of vanilla ether. Well, in AVE, you can deposit vanilla ether and you can get effectively the ETH staking yield while holding on to vanilla ether because you've deposited into AVE. And so we have the private market solving some of these problems. And the ETH staking yield is kind of viewed as like a way to inject eth into the private market, you know, the central bank issuing currency into the commercial banking layer, and then the commercial banking layer distributing that to the rest of the ecosystem. And, you know, instead of maybe calling it a cartel, you could call it just, this is the free market, this is capitalism, this is the market economy building structures on top of the Ethereum economy, and these two things are harmonious.

and the desire to go full radical self-reliance is actually destructive of the market economy that's based on defy. That has monetized ether inside of ABE. It's monetized ether inside of un-swap and reducing the flows of ether into this market economy is going to be destructive of the thing

that has produced so much value for ether in the first place. So why are we fighting the market economy? Why are we fighting the defy layer? when in harmony, these two things together actually produce, you know, one plus one equals three. That's the other side of the perspective. And so, like, I think the defy people will want to hear from you guys some amount of, like, I don't know, like admission that some of these problems

are actually partially being solved, maybe not to the fullest extent of what you guys want, but the defy ecosystem is going to be harmed. to buy this. And that's the perspective that I see. Okay, so Sam, Sam, take what I've said and kind of respond to me. I want Jerome to go first. Sure.

Okay. Sounds like you guys are ready for this. Okay. There's so many places I want to hit there. I want the diplomat to go first and then I'll go and then you can clean me up. Okay. I will, I will never go to the extent of calling Avey and Laido a cartel.

I think they have brought tremendous good to the ecosystem. And naturally, this EIP is impacting a portion of their business directly. So it's very expected that them, Eiffify and so on, are the first to react. And over the years, they've been a very good stewards of the protocol itself. It's funny when you said, like, look, it's like the monetary policy, the Fed decide this and decide that. Well, when the Fed put its rate at 12%, suddenly the Fed's right just beat everything,

so everything goes to the Fed. That's the kind of situation we are in right now. There is literally no strategy that involves if maximizing, that cannot involve staking, because staking is notoriously low risk for many different reasons in terms of infrastructure maturity, in terms of slashing protection at the client level, in terms of amount of different derivatives you can touch on,

and also too big to fail. effect that nothing can beat staking. So we currently have a de facto best thing to do with our EF that is putting them at stake. But before that,

before we had staking, I mean, a pre-merge and even pre-launch of the pre-proof of steak, we also had a TFI ecosystem that was very healthy with a similar TVL, if I'm not mistaken.

So the situation that we are in right now is also something that we have fabricated with our lack of understanding of what the behavior of the staking will be at the right side of the curve. Like a lot of research went into making sure that we are paying enough

so the curve is good enough that people want to stake early on without knowing if and when they will ever be able to withdraw. But we didn't look at our capacity to actually make the market rich and equilibrium in terms of staking. So that's coming back to the first point.

Like, yeah, we need to make Ethereum a radically independent and incredibly neutral thing and so on. And I'd love to hear at some point the original designer of this curve expressed themselves and said, like, yeah, maybe we made a mistake. We should have looked at this differently. Now, from a pure DFI standpoint, I think DFI will be fine and even will be in a better shape after this change. The staking rate isn't free income at all.

It's funded by deluding every holder that doesn't stake. That needs to be understood. What we are removing is a subsidy for DFI's own users that they are paying through a bad door. Like, yeah, you get subsidized to go at stake. We don't need this much of if at stake. But you are paying that for dilution. But you have to know so that DFI has already repriced for much bigger version than this.

Like the rate fell from 20% to under 3% at the staking level over the years. And the landing market adopted, different staking derivary that adopted as well. Here we have a change that propose a published formula that has two years of runway. You can adapt. You can build around it. and I think that some spread will survive some other will shrink a little bit

what's missing and it's been asked notably by Stanley is like yeah but where is the cascade model of the LST and the landing impact and so all and I'm

trying to come at them and say like yeah you have the numbers you have the research team and the risk teams let's team up my DMs are open both the EtherFi CEO

and the AVACU knows where to reach out to me, and I would love for us to collaborate and build up this kind of model. Maybe the 18 months is too much, maybe the 18 months is too few. Maybe there's an adjustment that we need to make on this curve to make a smooth landing for everyone.

But that doesn't change the problem. We are paying too much for our security and we are over-denuting our asset and slowly pushing all if to go at stake and just replacing it trustless money with governance money, and that's not what we have signed for. With the argument around Ether, Dialectual,

I want to push back a little bit on that, just because of my understanding with how proof of sake works, right? So the idea is that there's just like unnecessary dilution, there's inflation, there's a cost to vanilla ether holder. And we need to preserve the value of vanilla ether because it's the most trustless asset in mankind. And so let's imbue that with as much moneyness as possible. Well, you want to preserve it as a portion of the overall set of holders. Yeah. Yeah. My counter argument, or at least something I want you guys to contend with, is that proof of stake is already incredibly efficient in the first place,

especially Ethereum's version of proof of stake. In terms of economic security, it's already crazy efficient. So the remaining issuance, which is already very low, naturally automatically flows to the people who are already the most inclined to hold ETH in the first place, which is the stakers. And these people, you know, we talk about, like, you know, Tom Lee is generating $250 million of ETH in ETH stake every single year. What is he doing?

I mean, maybe this changes, but like he's probably holding it. And so are all of the solo stakers, the natural thing to do for all ETH stakers is to hold the ETH that they are issued. So in terms of the dollar price on the secondary market, I actually don't see too much impact that this protocol will have in terms of the secondary market dollar price for vanilla ether, the asset, because it's not like the staking yield is equivalent to cell pressure. In fact, I would say that there's almost a negligible amount of percentage

cell pressure from ether issuance. And I know this is a little bit tangential to what you guys were talking about, but I do kind of want to throw that one at you guys. Before Sam, I'd like to respond with two bones that I will throw back at you. in this case. The first one is that the issuance is going to be 0.9, like in a few weeks, something like this. 0.9%.

Okay, that's fine, 0.9%. The max issuance that Ethereum can live on is 0.5. Actually, at the same level of staking that we have today, will be closer to 0.3 or something like that. But never mind. Let's take this delta for this case. So that's 0.4 delta. This point for delta at today's price is,

give or take $1 billion. okay, can we save $1 billion? Can we not overprint $1 billion? Well, on a couple of $100 million billion market cap, I think that's a meaningful cut. That's a meaningful way of doing things. So it's this, this is not a small amount. But indeed, when we compare a dilution,

we're like, hey, look, Bitcoin is diluting its holders by 0.8. And in a couple of years, they will have a halving. They would be 0.4 and so on and so forth. So if we are comparing ourselves to the leader in terms of market cap, like, yeah, we are in the weeds. Like we are in the same shape. And we are much more conservative and less dilutive than all of the rest of the proof of stake out there. But still, it's a billion. So can we save this?

Like we should save this in this case. And you're right. Like some of the holders of Yves that are the most, the most, the ether maxis, they are also staking and they are making money out of this. But are they making this money? Are they choosing staking

because it's what they want to do or because it's what pays the most? And I would argue that this is because this is what pays the most. If you have a vault on that sole purpose is to provide liquidity and write the volatility of EF

and that this vault is super long if and very conservative, that exposing itself too much, like trying to keep up the principle as much as possible, it's paying 1.1 or 1.2%. You're never going to have to only provide liquidity to this when you can have at least 1.5 at stake, and more likely between 1.5 and 2.2

for the next 2 to 3 years. So we are preventing other defy application or defy usage of EF that will be much more beneficial to the price action and the market setup of EF to arise by just funneling all the EF towards taking. And that's not even considering the security problem and credible neutrality problems comes at it. So that's my two points on this.

It's not a small change in terms of budget impact. We are going to save a lot of money. And also we are going to let EF be allocated to more productive thing than just adding a little bit of marginal additional security at the cost of potentially losing our own social backstop. I hear a lot of people against this

keep talking about Ethereum's issuance as a productive yield, and that is not true, right? I think Gansker actually mentioned this in his recent little note. You are taking a dollar from one pocket and moving it to the other pocket. So you're taking your subsidy, basically you're taking

money out of your left pocket and you're moving it to your right pocket with issuance. And in this case, you are doing it to encourage an activity, in this case, to secure Ethereum, and any penny more than what is absolutely required risks, well, first of all, it's excessive, and it's imposing an excess tax on the system itself, right?

obviously much more so on those who remain unstaked, and that's why everyone will go to becoming staked, right, to avoid this excess tax. But anytime, you know, there are all types of additional side effects of this. One is that you are effectively subsidizing an activity. And this is actually very similar to the subsidy that the U.S. government kind of implicitly gave to housing leading up to the global financial crisis.

You encouraged excess risk taking in this behavior. You know, the Zygdice was, you know, every American showed out at a home, right? And, you know, there were, Fannie and Freddie provided very, basically government guaranteed, lowered lending rates for those mortgages, and you got a tax deduction to be a homeowner.

And so in a lot of ways, you know, the same leverage that built up leading up to the global financial crisis is very similar to the subsidy that we're giving to looping, looping ETH, basically. And I don't mean to suggest that I think that the amount of leverage is high or worrisome. It's not at this point. But it's the same type of thing because of this subsidy that the protocols I've been showing. shocked that they think that they're entitled to this. They're entitled to take money from me, the non-technical Ethereum who doesn't, I share a validator with a friend. He is more technical than I am. But if I want to stake, because I'm non-technical, the easiest way, and certainly the way that provides me the most liquidity, is to use one of the dominant LSTs. And so, you know,

in a lot of ways, you're forcing me, right, to avoid having money taken out of my pocket and paid to a stake. I'm foregoing this, you know, this money. And by the way, once it goes above 50%, and arguably now, I realize that I'm guaranteed to get bailed out, even if that LST gets hacked or it's the operators become malicious or they're slashed, I'm going to get bailed out. So what risk is it? What risk is there, right? Why would I not just move my money into that LST or into that dominant protocol? So, you know, you often hear about the network effects of liquidity, which is true.

So the most dominant or LSTs will have the deepest liquidity. And that will be what will the network effect of that will cause them to become even more successful. But it is also the case that the bigger they are, the more too big to fail that they are, the more, the bigger they're going to get because that is a network effect. I'm going to, I actually know researchers who have used AVE, I'm sorry, not AVEA, but Lido, because A, it's the most liquid. And B, as it gets bigger, they know if something happens to Lido, it's going to get billed out. And that is sad.

That is, it's depressing. When I first found out about that, I was speechless when this person told me at dinner. It was almost two years ago. It was in Brussels. Look, this is not a problem. We can wait any longer to, to, handle. I think let me also address this issue of somehow being bad for defy. I totally disagree. I was shocked by this. I was very surprised. You know, I think that, um, first of all, again,

let me, let me set up the, the question for you, Sam. Like, after my podcast with, uh, Stani and Mike from Avey and Etherfi, the takeaway that they think will happen if the CIP goes through is there be a mass exodus of the ETH out of DFI because the staking yield will be lower, the incentive will be lower. Do you think that that is accurate? The subsidy to loop your ETH will be lower. Yes. Do you think that's accurate? Do you think that as a result of this EIP, there will be less eth in DFI? I actually think it'll be the opposite. I actually think that what will happen is the price is going to go up. You're going to have an epic bull market and the demand for leverage and looping is going to go stratospheric. So I actually... Wait, with...

With a reduced subsidy of ETH, because the issuance is lower, you think the looping will increase. Yes, yes. But I thought you want the looping to... Your price is going to go up. The price of ETH is going to go up when you stop diluting ETH holders, right? When you start... And I guess it's not just raw ETH holders.

It's at a system level, right? At a system level, right? You are... The ETH is... has too high inflation. It's too much for the market, and it's suboptimal, right? And by the way, when you make the monetary, and by the way, Ethereum is set up such that we have

what is basically a combined fiscal and monetary policy. We don't have Congress that, you know, funds programs. Spends, right, yeah. And an independent Federal Reserve, we have a joint. That issues, yeah. Correct. Spending and issuing is the same thing because it is just... It is the definition of money printing when you have a joint authority.

And so right now that money printing is just going to subsidize this single activity, which apparently, you know, they acknowledge it as a subsidy that they think that they need. I actually, I said this on Twitter a couple days ago. First of all, I think that the price. price of eth is going to go up when you reduce the issuance. I think that is just mechanically mathematical. I think the second, partially because this is unexpected, an unexpected monetary policy change,

that is a tightening of policy should almost, you know, by default, result in a positive price reaction. But two, it makes Ethereum more credible, right? Signaling and actually having this conversation and people learning, in a lot of ways, maybe the pushback against this is actually beneficial. So all of Wall Street and all of the companies out there are going to learn what makes Ethereum different and special.

You know, they're going to realize that Ethereum is not able to be captured, that it is the most credibly neutral. And that is going to mean more adoption and more growth. And so that is going to be positive for the price of ETH. But I think second of all, you know, we see this in all, almost every economic situation in history where the more credible a fiscal monetary policy that a country has, the more robust and vigorous the financial system. And so that is what, you know, if you talk about why the U.S. has the largest and deepest

capital markets in the world, people point to the historical strength of our fiscal monetary policies and a robust national defense. And so... And our court system as well, like our court of laws. The rule of law, right? The rule of law, yeah. So, absolutely.

So, and that goes to the credible neutrality analogy. So I actually think that this is... So I was very surprised. Now, let me just see one possibility. I think that maybe on the margin, and I think that this would be good for everyone, certainly in the in-state, but maybe on the margin you could see

you'll see D5 protocols that previously just felt like they were being pushed out of the market because they couldn't compete with this lending in a paradigm. You'll see other applications that will maybe on the margin grow and that would be positive and but maybe slightly on the margin in the very, very short term, but I really don't think so. I think it will be and I was surprised to hear it. I'm still a little baffled by it. I think that the only way I can really rationalize the position that some of the guests that have appeared on your show and others that on Twitter is that they're being basically very short-term oriented

and frankly very negative. Like my vision for Ethereum is so much grander than theirs, I just don't even understand why they would want to optimize for this short-term outcome when, you know, since, sitting atop of Eith, you know, an Ethereum that's worth 10 or 20 trillion versus one that is relegated to a future like Cosmos, that's the only way to kind of explain their behavior is extreme short-termism and a lack of fully appreciating the upside that Ethereum has.

I want to hear a little bit more about why you think this would be good for Defi. My initial reaction is that if you take away the issuance, you take away the subsidy, you reduce the total amount of new ether that looping and other activities like looping provides to the market. And so that market must contract, especially if looping accelerates the... Say this EIP goes through,

looping just accelerates our road to 50%. And if looping at all gets the total eth... approach to approach 50% why loop at all? Like the incentive dries up so much more quickly. But there are other things to do than just loop is what I'm saying. Right? You could pay all types of other things that but builders aren't going to be

there's not going to be the interest to capital and the motivation to explore those others when they're being crowded out by this excess issuance that is solely go, that is being only routed through the consensus mechanism I would like to jump in on the on lending itself like um if you if you take lending what's the future landing in the next six to 18 months you have a massive amount of r w a and tokenization that's coming to that's coming on blockchain hopefully they will stay on

on ethereum and that would be their their uh main pick in terms of where to what to land that's that's just the repo markets the global repo market that is going to change and use those kind of venues to function differently than they were before, 24-7 with lots of advantages. I want to see Ifr as a pristine collateral role in those case and not just something that you loop on. Just like the natural thing to do so. There's a, the relationship with a less dilutive, more price

is something that's clearly established in the in the, in the macroeconomic literature, like the less you dilute, all the things being equal, you should just have a better price appreciation. And from a security perspective, just it's a very complex spectrum to navigate, but it's not just the amount of eFest take.

It's the value of the amount of eFestate. So we have an opportunity here to even get more security by pushing the price up. And one of the reaction we had, one of the reaction we had is, very often time people were saying like it's just small you know it's just a small change like we already dilute so few yeah but the trend is more important than the delusion itself like we are training up we are definitely training up in terms of a amount of fee like going at stake

and thus we are training up in terms of a in term of dilution so the market recognized that this dilution is ongoing and it's compounding and it's not going to stop so when people are saying we should focus more on things that propel better adoption. There's literally no crypto entrepreneur out there that will tell you, like, I have a better catalyst than the token going up. I have to say, it's so bizarre that Ethereum has become the opposite of Ponziomics. Now we want to do the opposite. We want to like dilutonomics, you know?

I mean, like the fact that like we don't want to optimize our policy for both what is best at securing Ethereum and. as a byproduct of getting it right to secure Ethereum makes the price go up. You know, this is a rather strange, you know, dystopia of a very long bare market that Ethereum people have somehow lost this kind of basic perspective.

Let's just look at what happened when we have more eFET stake, just from a market perspective. So when half of the eFAR steak, by definition, half of the data stock, when 60% are, steak, 40% are not a stick. One of the driver of

large purchase on the market is, of course, how big is your slippage? How deep is the market? So as you send more EF towards staking, you are limiting the amount of EF that is available for purchase. So some people may say, like, yeah, this is great. Like, there's no more EF on the market because all the EF are going at stake,

but it's not good for the price. Who will not hold an asset that whenever you want to set it still have a, the price decision is not that good and whenever you want to set it, the, the sleep page is 1 or 2%. Okay, this is also something that boils down to how DFI function. It's not just a repo market and lending.

We have Dexas. We now have very complex strategies that are available, very sophisticated strategies that are appearing with the new venues that are popping up. I mean, you had morpho on the, on the podcast recently. We know also that, that Avey is doing things with V4 and so well.

This is getting very sophisticated. Now we have things we can do with our EF that are not just looking. And we should give those alternatives a decent chance and also not deal yourself. Make etherum the pristine collateral it should be and also the money it should be the trustless money. It should be for the global financial ecosystem. I think what I'm hearing from you guys is that

if we reduce the subsidy, we reduce the amount of new East issuance to pay for ETH staking, this might actually be a boon to the defy economy because ether is unlocked and made more available to the free market on top of the consensus protocol and might make ether more available for new defy startups or even current defy our startups to do more things with that ether because they don't have to compete with somebody they can't compete with

which is like the central bank of Ethereum which is the issuance protocol. I'd be curious if Jerome disagrees, but I mean, in traditional economics, you know, crowding out is the term that's used, right? Mm-hmm. When you hear from,

from ETF issuers and D80s about Bitcoin, that's like, oh, it's so simple. We just say it's $21 million. Even though the security budget is just hand-waving, like, yeah, well, we don't know. Like, maybe like the price we just double every time we lower the issuance.

That's actually the play of Bitcoin. every four years, we just have a, we just have a, and we just have a, and we say, like, look, it's getting rare.

And some people are saying, like, this won't apply to Ethereum. Like, okay, well, that's, I will definitely detect this. Anyway, it's very weird.

The beauty of Bitcoin, the beauty of Bitcoin is its simplicity of just say, like, it's 21 million. And everything else is hidden behind the curtains. We don't really know if it's going to work or not.

We have the opportunity with this EIP to make a very clear statement, statement that it the max dilution that you're going to have on Ethereum is 0.5. And we have our economic security fully figured out. So it's 0.5 max. That's your delusion.

And that's actually something that is starting to arise in the discussion that we've been having for the past 10 days, the heated discussion about issuance, is that some people, however sophisticated, you think they could be because they've been in this space for like 10 years, sometimes more.

Like they've seen all the things on defy and so on. And suddenly they are starting to realize that their yield is actually dilution adjusted. Oh, well, I need to adjust for delusion. Yeah, you need to count that into your calculation. And the new holders of Eif, the sophisticated holders that comes from institutions, that's the kind of question they asked. Like, okay, well, I'm getting how much, this much, but where is it coming from?

It's coming from issuance. Okay, so there's a delusion. So what's my adjusted thing? And what kind of tax am I paying on top of this? Huh, okay, let me compute that. The arithmetic just doesn't fit. That's a major improvement for Ethereum to have a limited amount of issuance

as low as possible, but as much as necessary. Keep it 0.5, keep it easy to frame. I'm not super hellbent on the 0.5. Maybe 0.75 is better. Maybe something else is better. But at least making sure that the market can find an equilibrium is what we need. And we have enough research backing to say that 0.5 is achievable

and it's good for our security overall. We should not let this opportunity flound. I want to talk about Tom Lee, because Tom Lee has been the single largest buyer, or Bitmine has been the single largest buyer of ETH in the last year by far, because he's plowed like $12 billion into ETH. And one of the reasons that he did that was the staking yield.

So Bitmine is getting something like a quarter billion, dollars a year in staking yield. And he's like using that to tout Ether as an asset, ether as investment to Wall Street and to like the marginal buyer of Heath. And so there's two concerns that I have here. First like we just kind, if we give this proposal goes through, the recent single largest buyer of ether ever who just plowed 10 billion dollars,

10 billion dollars into ETH, 12 billion dollars into ETH, with the promise of getting. staking yield is not going to have the staking yield that the monetary policy of Ethereum previously told him he was going to get. And so I know we're trying to create credible neutrality, but there's also something about, like, you know, don't tamper with the monetary issue and so that it financially harms people. It's kind of like also an ethos in the crypto industry. And so like we're kind of harming our single largest buyer of ether that we've ever seen. And also we don't really have this yield to advertise to Wall Street and everyone else

that he is using to sell ether to everyone else. And so despite all of your guys' arguments which I think are good, the optics of it of changing monetary policy right after our largest buyer ever buys a bunch of ETH is not great. Sam, how would you respond to that? Well, I've known Tom for a long time. at least 15 years. And Tom is very smart.

And I think that Tom would much rather get 50 bips or 100 basis point yield on a I think his target is $30,000 eath than he would 2% on a $1,000 eath. And for that reason, I'm, I would be surprised if Tom did not, you know, I would be surprised. I have not spoken to him directly and I don't want to speak for him, but I would be surprised

if he did not look at his what was in the best interest of himself and importantly for his shareholders because that's what he has an obligation to. And, you know, this really goes down to the value of your principal versus the value of your coupon. And I think that I made, I tried to make this case to, for solar stakeholders as well. You know, you are not going to get the type of price appreciation or short, medium, or long term that you would get with an optimal issuance setting for Ethereum. And so, again, just going back to Tom, if I look at, you know, his forecast, you know, he's as bullish on, I think, the future of Ethereum as I am.

And so I would be very surprised if he didn't see it the way that I did and want to earn 50 bibs or 1% on, you know, a 30,000 or a 50 or $100,000, eath that where Ethereum is the credibly neutral settlement layer for the global financial system. And the alternative is you keep your 2% and we are on the road to cosmos, which literally the atom token goes down every single day. And the analogy between here is very simple. similar.

And I think that this is, you know, I think, so that's how I feel about it. Maybe Jerome can weigh in differently. Yeah, I remember back in late May or early June, Tom Lee tweeted that he is not opposed of any issuance change, but it has to come with a large consensus and be whatever, like prepared and so on. And he hasn't expressed himself on the matter. and I hope he will at some point. But let's take the opposite argument.

Like if each one is really, if the staking yield is really bringing EF up without any consideration regarding security, yeah, why don't we like 2x or 3x or 4x the yields and see what happened? Like, yeah, if you can send us to NAMIC, let's go and made the trip. Why not?

But as Sam just said, Like, when you are G18 and ETF, you have your principal and your coupon. You sell the yield as the coupon. So sometimes you must have a hard time explaining, like, okay, it's paying 3%, but that seems a lot for something that's supposed to hold value. Like, is it holding its value? And then they opened the shot and like, yeah, it's sort of in this range, not really moving around.

Like, yeah. Like nobody cares really about the coupon. and if the narrative and the principle, it's not something that's convincing. So I think opposing the insurance reduction from a pure DAT-E-TF perspective is twice detrimental. Like, first it says, well, minimizing dilution is not so important.

It says we're not backing up fundamental changes that's going to improve the store value characteristic of the asset. So it's a weird thing to say, like, oh, you don't want the insurance reduced? What is your reason? Oh, yeah, defy problems and so on. It's so intertwined. Like, we don't want to touch that.

Yeah, but about the asset is, it's good to have a dissolution, right? Yeah, but, you know, like, you're in a difficult spot, I think. And secondly, when you say, I oppose the insurance reduction as an ETF for a DAT, you're saying, like, well, we accept that the de facto use case and, only use case of if is just to sit as a staking derivative or in a staking venue. Mostly doing nothing, not really promoting adoption or innovation, not, you know, not helping you out, except for extracting some fees out of the rent. But soon enough, you'll have the question like, well, the dilution is 1%, the yield is 2%.

What's left is just 1% adjusted. So is that really paying this much? okay, I'm going to do a little repricing of the principle itself. So, yeah, how is the principle supposed to raise in value if you are not doing everything we can to maximize its security, its credibility, and at the same time minimize the dilution that every holder has to bear? Let's talk about solo stakers.

The common response to this EIP was that this reduces the ability for solo. stakers to participate in solo staking. And solo stakers as part of the Ethereum structure are the defenders of last resort. Like we must have solo stakers in Ethereum or else this whole project doesn't work. And by reducing the amount of ether issued for security, you directly harm solo stakers disproportionately versus any other part of Ethereum staking complex simply because solo stakers have the highest fixed costs. you know, Lido or any other like staking pool has like low fixed costs and they can scale very well

simply by their size. But any decrease in rewards harm solo stakers the most because they're the ones who are paying for the machine, the internet, the electricity, the uptime, all that kind of stuff. So how would you guys respond to the critique that this pushes out solo stakers in favor of the cartel, the quote unquote cartels that you guys are trying to minimize? in the first place. Sam, how would you respond? The history of proof of stake is that, you know, they have been overtaken by cartels, right?

Other proof of stakes, not Ethereum. Correct. And so when we use a cartel word, we're not talking about any Ethereum entity, but we're talking about the boogeyman, the cartel boogeyman out there. Yeah, correct. Right.

Sotom stakers, everybody can come and said, I'm a solo staker, but sometimes they just have a, They just have a solostaking node and they are posting gravities or they've been active in the community for quite some time. And I can name probably 10, 12 solosakers that I know, including me, that are pro this kind of issuance. This kind of issuance.

The other ones are, you know, some are against, some are more composed. They want to dig more into it. They've got to make a better, more informed decision to support it or not as time go. But you're right. Like, Ethereum has been designed to be solo stakeable. And that's a pretty strong word because we have to impose a minimum stake of 32E for various reasons.

Like we don't want the network to be 50,000 staking nodes because the network throughput will have a bad time sending the blocks across the old network or those kind of reasons. So we have this 32EF. And 32EF can be a meaningful amount of money. But nevertheless, you should be able to spin a node when you have enough financial resources and you are decently technical. We have a lot of great organizations that are doing the work out there

to make sure that it's accessible to actually go at stake. Now, regarding the EIP itself and SOTUS takers, we've been correcting our own language and trying to make sure that we don't lead people into a misunderstanding that this EIP is, saving the solo stickers. No, it's not. I'm not going to try to make it up. We cannot claim that this proposal will preserve solo sticker share. We don't. The research on the matter is

genuinely split and we cannot pretend otherwise, but what we claim is quite narrower. Today's curve pushes the solo stakers out. That's it. That's what it does. The illusion rises, tax will hit and is already hitting the nominal number and there's no equilibrium to stop that either. So the status quo is worse than the change

because the status quo will push the solar staker out arguably faster, but it's split on the matter but I think arguably faster and it will end up in a much worse situation a situation where we have more dilution and more concentration

of stake in a few venues and way less solo stakers. So the tapering of the insurance remove the pressure regarding dilution, the pressure regarding tax and nominal numbers and allow us to have an equilibrium. And it's doing that without adding any burden that lands harder on the small stakers

compared to the big stakers. So it's generally applied the same way everywhere. We are taking a fraction of the yield from everyone and no fixed fee overall. So the status quo is not a good place to be in regarding the solo stakers. And some sort of stakers don't really realize that. Some stakers are like, okay, well, I care more about my principal. So you're cutting my coupon, that's okay.

I want my principal to go up. So they are supporting this because they believe in the after effect regarding the price. some are way less sensible to costs like a fixed cost of a $500 of hardware and time and so on, it's not that much so that like, yeah, I'm not sensible. I have 32EF already at stake. But nevertheless, the tax effect and the dilution effect applies at first at the solo staker level.

They are the butterfly in the forest, as I like to frame it. And the status quo is hitting them hard. order. They will get pushed out whatever happened, but the equilibrium that will be post solo stickers out may not exist and they will be out with much more dilution for everyone. So we don't want to claim that we are protecting them. We want to claim that we are making them in a much better fashion. Yeah. Yeah. I think unfortunately there'll be nothing to protect. I mean, Like I said, I share a validator with a friend. But if I'm not bullish on the long-term outlook for ETH the asset,

that activity is not worth it to me. And so I'll probably ask that we shut down that validator. Yeah, as a sort of stakeholders, you have the operational risk and you have the operation risk to bear that when you are putting your money into an estate, you have the operational risk and also the operational risk and also the, the risk that's inerranted to the LST. Arguably, the operational cost of the solo stakers are higher than whatever is out there,

but they have just one cost to bear. There are one risk to bear. And lowering the staking yield and allowing the market to find an equilibrium is also giving us a chance to find a yield amount that is both enough to save some solo stakers, and also to have the market-lender equilibrium at the same time. But we will come out first.

It's an open question, but what's for sure is that the current status quo is very much detrimental to the sales takers already. But remember also that solo stakers are not too big to fail. The largest staking pools are. And so why would you remain a solo staker if the largest pools get so big that they are undoubtedly too big to fail

that that is an irrational behavior, especially for one that you now have less confidence and it's long-term credible neutrality and the values that you signed up for. So, you know, I, again, for reasons that are not as purely economic that Jerome just went through, I think that there are other reasons that,

like what I just mentioned, I think that there's other angles here as well. I think that I think the two high issuance is actually, and you will not find there's not research on this this is an unexplored topic area but for a very long time a lot of

Bitcoin has been mined in Iran and China countries either where people want to get money out because for capital flight out of China for example where you're effectively spending your R&B to receive Bitcoin and then swap that into

tether for example or you know you mine in Argentina or Iran or places where the inflation is very high. And you want to, again, spend your local currency to get an asset that retains its value that you can and has a better inflationary profile. I think that we should actually probably, we could see a, if we limit the growth of the,

the centralized staking pools, you could actually see a better diversification of geographically of staking operations. Again, I don't think you're going to see any research on this, but I think that that is, because again, the economic soundness of the asset is one that they want to own. Yeah, and maybe to conclude on solo stakers

regarding how we can help them, Actually, what actually work for solo stakers to be more competitive with the rest? You have anti-correlation attestation penalties that is now being proposed for inclusion in Hagergata. I think it's a bit far from the original design of this EAP-7716. It's been redesigned and reshaped by Hoshin from Obo. That's the kind of thing that will help solo stakers, for sure. And personally, I kind of support this kind of. The economic requirements also go down significantly with lean, correct?

Yeah, yeah. Indeed. And we need also MIV burn. If you want to help the Soto Stakers, we need MEV burn. That's also something that's going to tilt the scale in favor of other solar stakers. But again, like the Stapto score is unacceptable for solo stakers. And once they will be out, we'll be like, yeah, but we have a denution of 1.3. and we are in an inevitable trend of coming up and up and up and sticking as time goes.

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or find a link in the show notes. There's a new episode waiting for you now. I want to ask about the contention behind this EIP. This has been one of the most contentious EIPs in recent memory in years that I can really remember. What's your guys' plan to get this EIP through, given that there's just a seemingly a lot of hostility and contention around it. Well, very simply put, we're going to keep our heads up, continue to respond to the different arguments that we are facing, adapt,

see if we get good reasons to modify the parameters that we have laid out, and let the PFI process continue. We have the 26th of October for the consideration for inclusion deadline. We want to let this debate continue. It's great to see that people are more and more informed on the matter. We are getting interesting feedback to adjust. Some people are complaining that this should have been withdrawn already after just 10 days. But to the contrary, we are getting a lot of positive things out there.

We are trying to find a rough consensus on where it should go and how we should adapt. And I think you'll be surprised by the type of endorsement that will come in the following weeks as people get more accustomed to the problem and more accustomed to the risk of doing nothing. And if it's not for this fork, it will be for the next one, but the gender path is now. So we should not let this window for policy close.

Yeah, I mean, this is not a new issue. And those who, a lot of those people who are claiming it was whatever. Many of them, I think unfortunately, are misleading you. This issue has been going on for at least five years, so much so that the researchers who worked on it have now almost all give it up. My friends are at Eath Labs, unfortunately. I mean, they genuinely have burned out on this, right? This goes back to at least 2022.

At that time, we put in place an asymmetric, change to the validator queue to slow down the rate of new entrants but left it unchanged for exits because this was a

problem known then and we wanted to provide more time maybe it was 23, 2023 I wanted to provide more time for robust research you know, Ansgar and Casper came back in 2024

with a proposal it was brought before Alcor Devs and a light raised concerns and it was shut down. That proposal was more aggressive than this one. And we've had another, what, two or three years now, where I think actually, unfortunately,

there's nothing really more to explore from an academic standpoint. It's almost the exact opposite of what the naysay or say. And so I will say, like, you know, while sometimes I regret my spicy, this on X. It's, you know, I'm in many, in many cases, look, I am in this space

at the risk to my own reputation and career. And I make strong statements at personal risk to my reputation career. And so you should, you should appreciate that it's not done lightly. I'm not seeking Twitter followers or anything else. I'm doing it because I care very deeply about Ethereum. and because I have gone all in on Ethereum

and I don't see a path without defending Ethereum's credible neutrality. And this is the minimum we can do to protect that. And I, for me, and again, I do not think this is Jerome's position, but I think for me, this is a bit of an existential. kind of moment. I think that Ethereum community really needs to

you know, both look at the economic interests of the people they follow on Twitter, but they also need to do a little bit of, do your own homework on this issue. There's a wonderful website, originally maintained by Casper called issuance.wetf.

There's so much research there. You'll never be able to get through it. but maybe point your chatybt or Claude edit and ask some questions. So there's nothing like, you know, whatever the nayser say, whether it's like it's been rushed or it's like, we need to do more research or there's concerns. All of those things have been brought before. And it, you know, this is getting a bit. There are no real defensible remaining objections in my opinion. Again, I'm not even very happy with this.

Jerome will tell you the morning the EFD dropped, I called him very upset because I was not happy with the 18-month, two-year implementation. I thought it was unacceptable. And yet I'm here, because I am compromising, I'm here defending it because I realize that we need to

do what is best for Ethereum, even if it is suboptimal. I mean, my, I think maybe the exact thing I said to him that morning was they've already had five years to adjust. They don't need another two years. And I don't mean they being defy protocols. That was not what I had in mind. This has been a bit of a surprise to us.

What I really meant is the staking service providers because all of them have been involved in this debate. You know, Lido actually has an individual, Artem, who shows up at every single, Ethereum Foundation sponsored issuance conversation.

And he argues for is it maximal viable issuance? What is it? He basically argues for the exact opposite of Ethereum's historical position.

So literally they have one person who's, I think he doesn't actually work for Lido, I believe he works for cyber fund. And he shows up and literally, literally is always given an opportunity to speak.

He's published some work on this. So this is not new. This is not new to anybody. It's not a surprise. This has come before all core doves before. This is something that is very, you know, well traveled. And so I'm increasingly frustrated. I think that you could question.

And I have, you know, I think you could question whether or not, look, if we can't make this change, because staking service providers believe it is not in their economic interests, and they're able to maintain a more active social media presence, maybe Ethereum already is captured. I have a different view on that because I've been in the space for like 11 years now, mining in the early days. And I remember the time where we had the difficulty bomb. So whenever we had something contentious to pass on the rewards,

we're like, yeah, let's have the difficulty bond kick in. And suddenly, like, yeah, it's making things much easier to adjust, because the whole network is suffering. We don't have a difficulty bomb for staking. Nevertheless, we have lean coming up. It's the next three to four years. We are proposing a change that can last for a very long time, and that as a transition pass to it.

Neither I nor my co-offers have any interest of forcing something through. Yeah, I want to stress that. We're not forcing things through. Absolutely not. But anyway, nothing can be forced through in the EAP process itself. I was about to say,

I don't know how that would happen. And if anything, I've been the one behind the steams for the last two years demanding that we get something proposed. It was a little bit funny when they tried to call it an ivory tower initiative, when the ivory tower is not really involved here. In any case, sometimes you have to say the uncomfortable thing out loud.

We are on a dangerous path. And the current regime is bad for our security, it's bad for our credibility, it's bad for the market signal that we give in terms of boldness and capacity to adapt. It's mostly bad for solo stakers, but it's very bad for Ethereum itself. So I'm at least glad that we are having this discussion

And I can definitely see the light at the end of the tunnel coming up Jerome Sam the first time we covered this episode was with Onsgar and Casper back in in 2024 And stake targeting was compelling to me then I think there are a lot of arguments that I think people need to Truly contend with with stake targeting One of the biggest arguments that I really like is that this is just a natural continuation of all Ethereum's monetary policy changes that it's ever had.

It seems to be that this is like the path that ETH monetary policy has been on. And I think the arguments that you guys have that we aren't done yet on that arc are compelling. I think that need to be contended with. I do also take the arguments that the DeFi ecosystem has to compete with the issuance rate of ether.

and if we are overpaying for security, we might be able to hit two birds with one stone in reducing issuance and making ETH more productive outside of ETH staking, and that's good for the DFI economy. I really like these arguments. I am somewhat worried about the optics of the monetary policy. I am also worried about the lack of consensus

around this EIP on an EIP that needs to have a lot of consensus to go through. I think some of the arguments that people give is like this EIP doesn't have consensus, therefore let's not do it. I actually think that's a bad argument because not having consensus is not a reason to not have consensus. It feels like it's a little auraboric. I hope this conversation can continue. I think if we can get consensus on this EIP,

that it could be very good for Ethereum, as you've alluded to Sam. I think that's a long road. I think there's a lot of conversations that needs to happen. I think unfortunately that's just the way that it works in Ethereum. These are kind of all my thoughts as we sign off here. I want to thank you guys for coming on the show. And maybe if you guys have any last asks of the bankless listeners, of the broader Ethereum community,

or just any like next steps for everyone in particular. I'll kind of give you guys the final floor here. Absolutely. If you are if you are if older, this will benefit you. So make your voice heard. Indeed, it's a contentious and we are far from consensus. at the moment, but it's only been 10 days. So we are at the beginning of the process,

even if it's a short process. We have a way to get this through into form a large consensus on the matter. But do also note that not acting and delaying the change is just making the change much harder and at the expense of every e-folders. So the time is now.

I want to thank David and the bankless community for hosting this two-part discussion and it is very important to Ethereum. And I want to thank Jerome. He has really stepped up to, I think, provide a public service to Ethereum. That's something I don't think I could do. He's really doing.

And so I want to thank Jerome as well. And I would also say that both of us are eager to have any and all conversations. We want what is best for everyone. And we're eager to engage in constructive dialogue with everyone. So, you know, we're both pretty available. You can include our telegram and Twitter handles and show notes. Jerome, is ECC going to be a banger this year? Of course, 10 years anniversary, and we have a lot of issues and stuff to discuss.

No, just kidding. Yeah, it's happening. It's happening in April again, early April. We hope to see the weather forecast will be as amazing as it should. And, yeah, hope to see everyone in Ken again in the 12th of, of April. Jerome, Sam, thanks for coming on the podcast. I appreciate you guys. Thanks for having us. Bankless Nation, you guys know the deal. Crypto is risky. That's why we're here, though. The institutions have landed. So we are going even further 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.