Bankless - Why You Should Still Be Bullish ETH | Anthony Sassano

Episode Date: November 5, 2024

ETH is down bad when compared to SOL & BTC, but is all this narrative following price or something more fundamental? We’ve got Anthony Sassano on the podcast today. He’s a notable angel investor,  ETH bull, and creator of Ethereum podcast The Daily Gwei. Anthony is here to bring us some clarity to all the noise that has been going around the ETH price these days. He answers the criticisms, gives us the bull case and tells us what’s next. ------ 📣 GET YOUR ALL ACCESS PASS TO THE PODCAST https://bankless.cc/podshownotes   ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2    ⁠ ⚡️CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiGovernance    ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum  🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle    🦄UNISWAP | BROWSER EXTENSION https://bankless.cc/uniswap  ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/89?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E  ------ TIMESTAMPS 0:00 Intro 5:01 How is Ethereum Going? 8:52 Why is ETH Down Bad? 19:43 Are L2s Parasitic? 34:02 Is Ethereum Security Overkill? 39:41 ETH vs SOL Metrics 46:32 Making the L1 Great Again 54:41 ETH Pincer Attack 1:01:21 Investors Barbell Strategy 1:05:42 Ethereum’s North Star 1:12:57 ETH Bull Catalysts 1:18:25 Based Rollups 1:28:07 Ethereum’s Marketing Problem 1:37:37 What’s Next for ETH 1:48:46 Closing Thoughts ------ RESOURCES Anthony Sassano https://x.com/sassal0x   The Daily Gwei https://www.youtube.com/c/TheDailyGwei   ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠ 

At that market cap, we need that bigger money marginal buyer to decisively move ether. But I think as part of the regular market cycles as well, with a flight of new kind of money coming in from like retail investors, that can still move ether. But if you want ether like 10, 15, 20K, it needs to be the big money as well, like the Wall Street ETF money. It can't just be that regular retail buyer. Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is Ryan Sean Adams.

I'm here with David Hoffman. and we're here to help you become more bankless. We've done a lot of ETH episodes lately. Some ETH episodes that have been more bearish. This is not one of those. This is an episode that is Max bullish on Ether, the Network. We got Anthony Sassano here. He took a couple months off on vacation,

and he came back with some bull-fud-busting fury. Pent-up demand. Pent-up energy. Yeah. I think he heard rumor of some of the episodes. that we did with, you know, like Kyle and Max, and he wanted to, you know, come on and basically refute some of the points made. So we've got three parts to this episode. First, him answering the criticisms, then him making the bull case for either the asset and explaining why he is still bullish and then prognosticating on the future, particularly the question that's in a lot of Heath Holder's mind is like, uh, when we going up? Yeah. Is this cycle going to skip? When us? My asset? What about ether this cycle? So we get into all of that and more.

Anthony Zazano just has an absolute wealth of knowledge. It kind of comes at you like a fire hose. So listener, brace yourselves because here we go. Let's go ahead and get right until our conversation with Anthony Sizano. But first, a moment to talk about some of these fantastic sponsors that make this show possible. Especially where we prefer to buy our crypto assets these days. Cracken, our preferred crypto exchange for 2024. If you do not have an account with Cracken, consider clicking the link in the show notes.

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Bankless Nation, someone very special on the show today, a notable angel investor, perhaps known as the Eith Bowl of Eith Bulls, the creator of, of the Ethereum podcast, The Daily Gway. Anthony Sizzano, welcome back to Bankless. Hey, David, thanks for having me. Hey, Ryan, how's you going? Going well. This is a long time coming this episode.

Yeah, yeah, definitely. I think it's coming at the right time as well. Anthony, I'm just curious. Are you still bullish ether? Just curious. Oh, man. That's a funny question because, like, the default answer is yes. But, like, my today answer is also yes.

Okay, so I want to kind of zoom out before we get into many of the questions that we are going to ask you, which are going to be some of the same questions that we have asked our other guests over a handful of episodes that we've done, both on the bullish and on the bearish side. We're going to throw some of the same questions out your way, but I want to zoom out. The Ethereum project is a big project. Started in 2015. We are now in 2024. Some of that project, which was once ideas, has now manifested into real life, zooming all the way out. If we went back in time when we all met, me, Ryan, you all met in 2017, 2018, and we were able to zoom forward to 2024 and see what's up with Ethereum, how would you think that it has gone? Like, vet the progress, the successes of Ethereum, the project, as we once saw it in 2017, 2018. Yeah, so, I mean, just to give some context for listeners, I got into Ethereum in early 2017.

So I missed things like the Dow, and I missed a lot of those kind of, I guess, very early. I guess years, 2015, 2016, which were pretty formative, I think, for Ethereum as an ecosystem. It really tested Ethereum. Like, the Dow was Ethereum's biggest test, I think, maybe ever at this point in terms of the amount of controversy that it made for the Ethereum ecosystem or created for the Ethereum ecosystem. And then the fallout from that is still being felt to this day, actually. We still reflect back on the Dow in certain kind of areas of Ethereum as a kind of example of

what not to do or what to avoid or how to build Ethereum so we don't have to deal with that ever again sort of thing. And it obviously informed a lot of smart contract development in terms of security because it was the first big hack from a smart contract. And obviously it led to the worst case scenario, which was altering the chain within a regular state transition to quote unquote fix it. Right. So there was a lot of lessons learned there. But when I got into Ethereum, the ICO mania was just kicking off. So my first kind of, I guess, impression of Ethereum was that everything was fucking awesome. We're getting proof of stake this year. Like it's all going to be great. We're going to scale. We're more scale.

than Bitcoin, it's going to be amazing. So I think I got in at like a nice time because I obviously wrote it up that year. It went from like $10 to $1,400. Everything was amazing until obviously like towards the end we started hitting like real scalability kind of limits with crypto kitties clogging the network. The ICAO is clogging the network. And it became very clear, I think to everyone that a lot of extraction was happening in the ecosystem as well where these ICOs were not novel ideas anymore. It was a scam dressed in a white paper really. And a lot of money got sucked. out of the ecosystem. Billions of dollars, of course, tens of billions potentially got sucked out of not just the Ethereum ecosystem, but the crypto ecosystem because people were selling their other

crypto assets like BTC to come into ETH to buy these ICOs. So that was my kind of first impression. But then during the bear market of 2018 and 2019, I stuck around. You know, I tried to do what I felt was most valuable. I created ETH Hub with Eric Conner. You guys created bankless during that time as well. And we all kind of got together and started talking about Ethereum there. But what's funny is that while like there was all that optimism in 2017 that everything was coming like that year, nothing ended up coming from like another three years, right? Pryver State didn't get to live it until December 2020. Defight didn't take off until really mid-2020 in a really big way, even though we had the

protocols live for a while. Scaling was an absolute pipe dream at the time. We were still talking about like state channels and plasma. There wasn't really roll-ups yet that came later. So if I was to look back at 2017, I would say that, yeah, because the bull market kind of, I guess put a shadow of all of this. It kind of hit it away for a little bit, but then it came to light in 2018 and 2019. So I would say that today, like thinking back, I'm actually amazed that where we are today,

given where we came from and like how everything was stacked against Ethereum at the time as well, considering that we had that brutal bear market after the bull market. So yeah, I would say that we've exceeded my wildest expectations at this point. Then why, in that case, would you say eth is down so bad now? When you look at some of the dominant pairs that people look at these days, we have the ETH-BTC ratio down for two years in a row. Solana-Ether ratio up straight for a year in a row. How do you account for this price action that you can't really call it like local price action

anymore when some of the trends versus Bitcoin at the very least is two years old now? So how do you account for this? I try out to over-index on price ratios. I try to look at what ETH is kind of valued as in kind of, you know, USD terms first and foremost. So yeah, it's a $300 billion asset. So it's obviously absolutely massive. It's one of the most valuable assets on the planet. I think it's worth more than Coca-Cola. I was looking at the other day, which is kind of funny when you think about the fact that like everyone knows who Coca-Cola is. It's a global brand. I'm pretty sure everyone has had at least

one of their products in their lifetime. Whereas Ethereum, on the other hand, is nothing like that. Like, most people haven't heard of Ethereum at all and definitely not bought Eath. So I think that's a pretty big achievement already. But in terms of ratios, the reason why I don't overindex, on them is because they're a picture in time, I think. And you mentioned that against Bitcoin, it's less, I guess, like, local and more kind of macro. It's been many years now. I understand that. But then against kind of other assets, I think it's a picture in time of where we're at. If you're going to talk about, like against Solana, for example, which obviously is Ethereum's kind of main competitor in the ecosystem today in terms of like being a platform to build

things. I have other opinions about how I believe Ethan BTC are competitors as well, and East main competitors, BTC, to be money. We're going to talk about that, of course. But in terms of like the actual platform itself, the technology, obviously Salinas had a great last, I guess 18 months, you could say, maybe maybe a bit longer than that. They've onboarded a lot of people into their ecosystem. They've kept building. They've kept grinding during the bare market. And they're basically experiencing a lot of what Ethereum experienced last cycle. But it's fresh eyes, it's new, it's the shiny new thing, right?

So that's why I don't like to over index on this snapshot because, like, you don't know what's going to happen in the future. You don't know if the same thing's going to happen to Solana where a lot of that activity washes out and go somewhere else, maybe another. competitive network. Maybe it comes back into Ethereum layer two's because we're scaling up as well. So like Ethereum has sat still and done nothing. So I think it's just a picture of the current landscape, the time, what we're in now. And it doesn't really have any, I guess, like, bearing on the future. I think that's one lesson we can take from a lot of crypto price action is that a lot of it reacts to the now, to the very short term. And a lot of it has a very delayed reaction to the long term. Because if you look at the players in the crypto ecosystem, a lot of them don't have a long term,

I guess kind of mindset at all. A lot of them don't understand enough to have a long-term mindset because a lot of people who get into crypto, for better or worse, are just in it to make money. They don't care about the technology. They're chasing where the money is. And there's nothing wrong with that. But you have to kind of take that into consideration and give context to understand what's happening in the market. It's just a very complex kind of beast there. But I think I saw a tweet. I think it was from Jill Gunter. I'm probably going to get the actual tweet wrong. But she basically said that every other chain is living in Ethereum's past or Ethereum is living in every other chain's future. I think that's the best description I've ever seen of

that kind of phenomenon there, because every issue that Ethereum has today, or every perceived issue, will be an issue for these other chains in the future. And you're already seeing this as time goes on. The more mature an ecosystem becomes, the more issues, I guess, rear their ugly head, especially when it comes to pace of development. The bigger an ecosystem, the slower your pace of development. And this isn't just for blockchain. This is true for centralized companies as well. Like a small nimble startup is going to move a lot faster than Apple, for example, when developing new products and new features and stuff like that, because it doesn't have all that bureaucracy. It doesn't have to go through a million different product managers,

so on and so forth, right? Doesn't have to make sure it doesn't harm the stock, so to speak. So there are complete differences between big and small. And I think that the Ethereum competitors, a lot of them are still very, very small today, right? And they can move very fast, very nimbly, shining new thing. People love that and attracted to that. But then as they get bigger, they just fall into the same thing that Ethereum has fell into in terms of like they're a really big ecosystem. They have to move slow now. They're mature. So no one, you know, people like, oh, yeah, that's been there for ages.

Like, that's old news. I'm going to go bet on this shiny new thing. So that's going to happen. And I, and I, and I'm strongly confident in that because it has happened to Bitcoin. Bitcoin was the, obviously, the, the shiny new thing once upon a time. Now it's the old boomer thing. Ethereum, same thing. Shiny new thing.

Old boomer thing. So on and so forth. It's happened to pretty much everything that's reached a certain critical mass here. And the last thing I'll say, the one thing that really excites me about the Ethereum ecosystem is that we're basically trying to have the best of both worlds. We're trying to have the old established kind of like mature chain with Ethereum layer one and the small, nimble kind of startup, move, fast break things, thing with L2s. And I know that there are tradeoffs there with interoperability and things like that, which I'm sure we'll discuss. But the way I look at it is that we've essentially done this thing where we're trying to thread the needle between being that old kind of like, a mature platform and being new and upstart and attracting those new people.

Because that's the only way you're going to attract new people is making it so that they feel like they're coming into something new and exciting and not something that's old and dated. So there's a perspective out there that the choices of the Ethereum roadmap have led Ethereum into a path that has changed its fundamentals, right? The fee burn of ether is down because the layer two roadmap took it away, right? So as a result, the vibes on Twitter are bad. be in and the narrative around Twitter right now is bad because the price is bad. And some people are saying, well, this is actually a fundamental truth. This is a, as a reaction to the roadmap, which has,

is flawed and has led people down a not a very value accretive path for Ethereum. But I think what you're saying is, well, actually, all of these chains are on kind of more or less the same paths. And Ethereum, we had our kind of like euphoric fun times in 2021. And now we are kind of doing this very hard thing, which other chains will also have to do. And so the main dislocation between prices of Bitcoin, Ether, Solana, is actually just a dislocation in the timeframes of many of the market participants. Some people are looking kind of like looking in the short term, placing their bets in the short term,

and not really looking out into the long-distance future horizon. And as a result, there are dislocated market prices. Is that a summary of what you're saying? Yeah, I think so. And also, like, I don't know if I maybe use the word dislocated. It's, as I said, more like a snapshot in time. You know, it's the market basically saying, well, we give this kind of platform, this percentage of odds of succeeding over a certain kind of time frame.

And this is how much we think it's worth against Ethereum. Maybe it's going to outgrow Ethereum. Maybe it's going to outstrip Ethereum. And you mentioned kind of things like value accrual to the asset and a big reason why. I mean, especially with Solana, where they've been generating a lot of this fear of new lately through priority fees, through things like MEV, which, you know, which, Ethereum has done in the past. Ethereum did this in 2021, right?

Our fear revenue was absolutely massive. We obviously had the burn go live, which made it look even better because, hey, deflationary Eith. But I think that long term, what seems to happen in every ecosystem, and Ethereum is the prime example here, is that that value is considered leakage to the L1, where the apps themselves look at that. I'm like, hey, I want that for myself. You know, the MEV participants look at that and it's like, hey, why am I paying so much

for this? Like, I want to pay less to extract MEV. I want to still extract the MEPV, of course, but I want to pay less for that because they're businesses at the end of the day, right? They're profit maximalist businesses. They're trying to make money. I mean, I think the most profit maxi entity in crypto RMEV related kind of entities. Like their whole business revolves around making the most amount of money. So what you've seen with Ethereum over the last couple of years, and this isn't the only reason, but this is a big reason. The MV on Ethereum has been minimized a lot for the user.

The user is able to protect themselves through things like KowSwap, for example. there is private order flow, and there are tradeoffs here as well. I'm not saying it's a good or bad thing, but it's what has happened. And that's taken a lot of this kind of fear of a new off and also smoothed out the fee market too, where if you have like these, I mean, 1559 did this as well, like the IP159, but essentially you have like a much more kind of orderly layer where essentially people are protecting themselves from MEV. The apps are potentially internalizing that leakage and accruing it to themselves rather than leaking it out to the L1. And I think that's going to happen to to every mature kind of L1 ecosystem and even L2s.

It's not just the L1 here. So that's a big reason why I think that overindexing on fear of a new for L1s is the wrong move. And valuing these things based on fear of revenue is the complete wrong move. Because if we did that, Ethereum wouldn't be worth $300 billion or ETH wouldn't be worth $300 billion. It would be worth a lot less than that. If it was just valued on its fear of revenue, even in the times that its fear revenue

was really, really high, it shouldn't be worth that much. But if you're just valuing it based on. that. But my strong belief, and I believe you guys agree with this, and this is a belief that I've held since 2019 at least, so this is not a new thing. It's like five plus years of it. My strong belief is that every single L1 token, if it wants to be durably worth hundreds of billions, trillions of dollars, it has to be money. It has to be a store of value. There is no other path to that because of the phenomenon of there's no way these apps and these kind of MEV searches and anyone else in that pipeline are going to leak all this value to the L1. It doesn't make any sense. The incentives do

not go there. The incentives go the complete opposite way. And I think what we're seeing now as well is that more and more people are accepting of this because we have the evidence to back it up. It's all well and good for us to say, ETH is money. It is a store of value. But people ask, you know, what is the evidence to back this up? Well, to me, the clearest evidence is that ETH is worth $300 billion. Bitcoin's worth $1.3 trillion. And neither of them, especially Bitcoin, justify enough, so justify their valuations via their fear of revenue, not even close to that. So this isn't to say that Ethereum isn't going to be able to generate fear of a new at L1, and that shouldn't accrue value to eat as an asset as well. But I think we're talking about where the bulk of

the value comes from, it seems to, based on the evidence, not based on just me saying it, it seems to come from a monetary premium, from a store value premium, and people believing this and wanting to actually hold the asset. And then you've got everything else that falls into that as well, which accrues value to ETH, but that's the kind of way I see it. And I think if we're talking about what's happening now where people are allocating money, I think people are seeing these high Salina revenues like they saw the high Ethereum revenues and being like, oh my God, I want a piece of that. Like that's really high. That's going to keep growing. It looks really good. The charts are up only. And I think the same thing's going to happen where with Ethereum, a lot of that was minimized.

A lot of that was a lot of that came down over time just naturally. And I think that's what's going to happen with every network. And I'm not trying to pick on salina. It's just obviously the obvious example here or what to compare it to. But I think that's the end fate here because a lot of it is MEV as well. That's all people don't understand. A lot of it is MEV, which is how to users. And we want to internalize that. We want to make sure, well, the apps want to internalize that. And we also want to make sure users are protected from this because they're losing a lot of money at the moment. So let's do this, Anthony, because you are Eith Bull of Bulls. I mean, they say, like, bankless is bullish Eith. And you're like, I think maybe we certainly are.

And also, we have nothing on you. We don't hold a candle to Anthony. So let's divide the remaining portion of this episode into maybe, like, three kind of paths for us. First, let's have you directly answer the criticisms. Then let's have you give us kind of the pure, unadulterated bull take on ether the asset. And then finally we'll kind end with you maybe predicting what's next. But first, answer the criticism. So there have been a lot of criticisms of ether and its value accrual and Ethereum the network. And let's start there. We'll kind of lightning around this, Anthony. So like I'll just throw you know, criticisms flood your way and like you can kind of like, you know, deal with

smacking it down or addressing it however you see fit. And I want to start with the criticisms in kind of like three different sections. So like the first is the criticisms that come from outside the house, from outside the community, maybe the Alt Layer 1 VCs, you know, outside of the Ethereum community. That's one subset. Then those that are inside the house, internal to the Ethereum community that I see more often, and then kind of the neutral parties, the market onlookers. So first, criticisms coming from outside of the Ethereum community. This first one, this has been a main one and kind of like a narrative staple in 2024

against Ethereum, which is this idea. L2s are parasites. All the L2s that have launched are primarily like clones of the L1. You know, we're copy and paste uniswap. And so that results in taking of users liquidity and defy from a, Ethereum and parasiting, all of the, like, you know, TVL value accrual. What do you say to this idea that L2s are parasites? The main reason this kind of narrative and similar narratives exist is because it's a really

easy kind of bike shedding point that people can throw into like the Twitter sphere, the social sphere, and get people just like constantly debating it because it sounds like fun on the surface. Hey, L2s are parasites because they're taking users from L1 and, hey, they're not paying much fees to the L1 yet and go discuss this until you guys run out of breath sort of thing. So I think that if you're a competitor ecosystem, the best thing you can do is basically so confusion, right, and so doubt in your competitor and get them talking about, especially when it comes to discussing this online, especially on Twitter in a very adversarial environment

there. But I think that the whole premise is just completely flawed from the beginning, even for people who may believe it. Like, let's discard the people who are just saying it to fight Ethereum and they don't actually believe it. they just want to soak confusion. But let's look at the people who actually believe this. The whole premise is flawed because it's essentially saying that if Ethereum didn't have L2s, then Ethereum would be doing fine. Like, that's what you're saying. And there would be no parasites

on it. There would be no one leaking, you know, taking users from it, which is completely false. The other L1s would be taking users from Ethereum. They did. When Ethereum, even the L2s, before Blobs went live, were expensive. Users were going to other chains because it was too expensive for them. So in reality, there were parasites. The parasites are the other L1s. They're the other ecosystems. They're taking the users from Ethereum. And Ethereum L1 was never going to scale like the other L1s are. It has a completely different scaling roadmap for Ethereum L1. So I think the whole premise, just to begin with, is completely flawed. Because by saying the L2s are parasites, you're essentially saying that Ethereum would have been fine with that at the L2s. It would have been, you know,

a growing ecosystem. Ethereum L1 would have been onboarding new users. When the FUDD, like, like, well, even a year ago was that, oh, Ethereum R1 is so expensive, all the users are going to go elsewhere, Ethereum is dead. And now that we're keeping the Ethereum, I guess, users within the Ethereum ecosystem, because these L2s are part of the Ethereum ecosystem, that's another narrative that they say, I don't know if you've got it on your list that L2s aren't Ethereum, but, like, essentially, from the base premise,

it just doesn't make sense. Like, if you actually reason it out, it doesn't make any sense. And I think that the people who actually believe it may just be confused about that and may just have like a wrong frame of reference here, But that's how I think about it. So are L2s, if they're not parasites, are they neutral? Or are they symbiotic? Are they net good for Ethereum the network and for ether the asset?

I think, like, if you look at each individual L2, like you could basically reason and say, hey, there could be an L2 that literally exists just to siphon off users of Ethereum. And its plan was always to become a new L1 or something like that and leave Ethereum. That is a possibility. That is always a possibility.

But if talking about the current set of like L2s that have most of the activity on them, your base, your Arbitrum 1, et cetera. I don't consider them to be parasites at all. Their ecosystems constantly give back to Ethereum, are constantly involved in Ethereum. I mean, team members from these L2 teams were involved in getting blobs over the line,

which means getting involved in the core development process of Ethereum, which is not an easy process. Anyone who's paid attention to core development process knows just how hard it is to get things over the line and get things into the network. But they did this. They're part of the community. They give back.

They do things like donate to the Protocol Guild. They're on Twitter defending Ethereum all the time. They're talking about why they're on Ethereum and why what they're building is only possible on Ethereum. So there's a lot of social kind of signaling around that. And yes, okay, they can be lying. But these teams, like optimism, for example, which is what base is built on the OP stack, Arbitrum, off-chain labs, they've been around for a very long time.

And they've been in Ethereum for a very long time and stuck with Ethereum for a very long time. So I think if you're just taking them on their word, you should never do that, but you can also look at the supporting evidence as well. And then in terms of what they're actually driving. objectively to the network in terms of fee revenue and stuff like that, they are still driving fear revenues to the network. They're still interested in doing things like interoperating with other L2s.

They're still interested in doing things like becoming a base roll-up, which would drive even more revenue to the L1. So there is a lot of different things that they're doing that I consider to be symbiotic and not parasitic. But I think, like, if you use the general term that like all L2s are symbiotic, I think that's incorrect because that is objectively false because there are some L2s that will become L-1s. Maybe they're smaller L2,

or maybe an L2 that becomes really big from incentives. And their whole plan was to basically become an L1 and be like, hey, look, you can survive as an L1 and do some kind of stuff there. Like the competition's fierce and people do these sorts of things here. But I think if you're looking at the ones that have succeeded and the ones that potentially are going to succeed in the future, the really big ones like these gigagas L2s, like Mega E people have heard of, rise. There's a few others out there.

If you look at what they're doing, they're literally saying, without Ethereum, we don't exist. So how can it be a parasite? If without Ethereum, they don't exist, then it's a symbiotic thing. With Ethereum, they exist, they thrive, and Ethereum thrives. So it's symbiotic.

That's the way I kind of view it. I want to see if I can actually strongman this argument a little bit more because I think some people, some of the people who say, layer twos are parasitic to Ethereum or layer twos aren't Ethereum won't actually be totally satisfied by that answer. And I think it definitely comes from the

perspective that all blockchains are kind of maximus of themselves. So when we have a user who's transacting on the uniswap on the Ethereum layer one with whatever amount of capital that they have, and then they decide to migrate to a layer two, objectively, less fee revenue gets burned via the Ethereum layer one gas fees, and it goes to optimism-based arbitrarum, you know, pick your layer two. And it goes into that Dow's treasury instead, because they collect their fee revenue. And Ethereum lost one user, Arbitrum gained one user, Ethereum lost like $10,000 of capital, Arbitrum gained $10,000 of TVL. And when Arbitrum captured ever fee revenue that Arbitrum captured, it actually only gives 100th of a share of that fee revenue back down to the Ethereum layer one via fraud proofs. And in the Ethereum world, we look at that and be like, thumbs up.

That's great. That's what we want. But then the, you know, the Alt Layer 1 camp will say like, well, sure, you kept it inside of the Ethereum ecosystem. So you got a sliver of that fee revenue. So congrats it didn't go to Celessia, didn't go to Salana, didn't go to Suisse, Aptos, whatever. So, yeah, it's in the Ethereum ecosystem. But you still lost the revenue and you still lost the user. The Ethereum Layer 1 still lost those things.

And so how would you, because I think that perspective is a little bit different than the answer that you gave. Yeah, and I totally understand that perspective, but I think it goes back to what I said earlier about kind of where would these users go? If they're not on Ethereum L1 and there's not an L2 for them to go to, where are they going? Well, we know where they're going, right? They're going to another L1. And that is a complete and total loss. It's not a 1-100th of a loss. That is a complete and total loss for Ethereum because you've literally lost the user. It's like someone buying a Samsung phone instead of an iPhone. That is a complete loss. Apple didn't get the sale. Samsung got the sale. Same thing here. Ethereum didn't get the sale.

Salana got the sale, for example, right? Like, and, and I think when it comes to, I guess, blockchains, there's a, there's a stickiness to it as well. There is a very big network effect to it. So by losing that kind of user, we're not only losing that user, but we're also reinforcing a competitor's network effect, which can potentially get them even more users that won't go to Ethereum because they're just going to another network

because that's where the stuff is kind of happening now. So I think that's the first point on that. But then there's two other big. big things here. One of them is that I'm the L2s as scaling ETH the asset as well as scaling Ethereum and Blockspace. So essentially scaling ether's money. So the fear accrual fear of any new stuff, at least over the kind of short to medium term is not a concern to me. It's basically us lost, you know, doing a lost leader where essentially the L2s are very, very cheap. They're not paying much revenue right now because we're trying to keep Ethereum ecosystem, Ethereum users within the

Ethereum ecosystem. We want them in the Ethereum ecosystem. We don't want them going to these other ecosystems because even though it's, I guess you could say, an objective loss in terms of fear of revenue and TVL to the L1, if you think of it as like a kind of like a big, big thing with Ethereum at the center and other chains orbiting Ethereum and kind of being part of Ethereum that way, then to me it's not like a total and irrevocable loss. Like it's still a net benefit, especially for the asset scaling that out as kind of money there. And especially when in the future we get more interoperability between these L2s. And when, I mean, some of them, going to be based L2s. And what that basically means people who don't know is that they use the L1

for their sequencing. So they don't have their own sequence. So they actually use the L1 validator. So they're very tightly coupled with Ethereum L1 versus maybe being a little bit detached by doing their own thing there. And I think kind of on that note, like I know we're going to probably talk about more ETH's money stuff, but that also flows into the value of ETH as an asset. As I said, like, I strongly believe ETH needs to be money. L2s are a really, really good way of promoting ETH's money. They've been doing it for years now. And some people make it. argue, well, you can use eth on other chains, basically. You can use eth on the other L1s. Doesn't that scale ether's money as well? And I would say that a little bit, but the ETH on the L1 is,

I mean, even on the L2s, it's an IOU. It's not like complete and real ETH because ETH is issued on the Ethereum L1. And if you want like complete settlement guarantees and assurances for your eighth, it's on the L1. But on the on the L2s, when they get to stage two decentralization, they have like an escape hatch there basically tightly coupled with the Ethereum L1. And you have this way back in case something happens to the L2. You have this way back home. But with the other L1, you don't really have that. And also the other L1s are not incentivized at all to push Heath as the asset. They're incentivized to push their own native asset as the money of their ecosystem, which is kind of funny when people fight back against like Ether's money. It's like,

well, you want everyone to use your native token, don't you? Right? So isn't that kind of the same thing here? So those are the kind of major points that I'd push back on there. But I get like, for a lot of people, they see the world as it is today. And it's very hard for them to imagine. the future and it's very hard for them to look at kind of the incentives and see, well, what's keeping these L2s in Ethereum? Like if they're able to siphon off so much value, why not become an L1? And that becomes like a huge discussion as well from there. So I understand the argument. I do. And I understand the argument for people who may not be aware of all the intricacies here. But as I said, you start analyzing it and breaking it down and you eventually get

to the point where you're like, okay, well, that doesn't really make much sense there. But it does require a longer term, I guess, outlook. You know, some of the, like, the L2s have a different token, and so they're going to be, like, reluctant to promote ethas money type takes. Do you guys, this kind of reminds me of, like, you know, back to everything in crypto we've seen kind of before. Do you guys remember back in the days of early defy when actually the first AMM automated market maker wasn't, like, uniswap on Ethereum? It was this other protocol called Bankor. You guys remember Bankor? and like one of the worries or concerns about bank war

from like the strong Heath Bull community was like hey why is Bankor like basing all of its trading pairs in the Bankor token? Do you remember they were doing this? Yep. And so it was like, uh-oh, like ETH should be the base pair because you're on Ethereum and like we want ETH to be money not some like bankor token and...

It was like the beginnings of an alignment conversation. Yeah, it was an alignment conversation. And there was like almost early discussion of like, well is Bankor Parasitic? It was that kind of a conversation. And then along came Uniswap. And of course, it used Ether as its base pair. And then obviously, you know, like has massive stable coin markets as well.

But that fit much more in the Ethereum ecosystem. Why? Because Ether was kind of the credibly neutral money across all of the other Defi apps. And so Ether was in Ave and Ether was in Compound. And now Ether made sense to be the dominant pair inside of Uniswap. I kind of think the same thing. will play out in L2s. Like if you just think of L2s, what are they?

They're kind of like apps, right? They're like, it's almost the same fractal pattern of the early apps, establishing ETH as money and DFI while L2s, the most credibly neutral asset for them to like to use as a store of value is going to probably be ether. And those that don't will be kind of disconnected from this network effect. Anyway, okay, we're still outside the house, outside of the youth community in terms of takes. This is another take that was given to us recently. It's basically like Ethereum is over-provisioned with respect to like its security, okay? And like other chains have kind of enough security. It's

almost the idea of like economic security is a meme. I won't go so far as to that. But the basic idea that Ethereum is like, you know, four-nines, five-nines with respect to its security. And all you really need for a global permissionless financial system is like 99.9% security. and like uptime or whatever else, right? And so the idea that it's over provisioned, we're not actually practically, Anthony, going to be like up against kind of nation state attack. And like if we are anyway,

neither Bitcoin or Ethereum or anything blockchain existence can actually withstand that. So like Solana or some alternative layer one security models is enough and all the solo staker stuff, all of this max decentralization stuff, that's like way overkill for what we actually need. What's your take on this? Yeah, I mean, I think it goes back to what I was saying about looking at more longer term.

I think that Ethereum has always been built with the mission of being as maximally decentralized as possible, respecting all the different vectors of that because it's not just the economic security via eight-staked, it's not just solo stakers, but it's also things like client diversity. And these things have downstream effects where with client diversity, not only do we get better defenses against, I guess, any potential attackers, But we get redundancy in the network as well, where essentially if one client was to have a critical bug in it, it wouldn't take the whole network down.

Whereas other networks, even Bitcoin, right, Bitcoin has one client. If that client has a critical bug in it and takes their network offline for whatever reason, there's no, I guess, recourse there in terms of other clients. So there are downstream effects here. And as well with the clients, you have more and more people building Ethereum clients as well and getting involved with the Ethereum kind of core development ecosystem, which further decentralizes out the core development, of Ethereum. So there are a lot of different angles to kind of attack this from, but I would say

it's basically a preference. It's not really a kind of argument or not really fud. It's a preference. It's like, okay, if you prefer to be in an ecosystem that prioritizes the, I guess, like, far end of the spectrum that Ethereum does in terms of being maximally decentralized, sensitive, planning for the potential worst case scenarios of nation states, but also of just like opportunists as well, wanting to break the network. Because it's not just, nation states. If an opportunity sees, hey, like, I could break the Ethereum network with a, with a bug. Maybe I found a bug in the core protocol. I can break it and I can make some money on this, whether it's in the markets or something like that. Well, there needs to be a defense is against

that as well. So I think from that perspective, you can go in all the different directions of how Ethereum kind of does that. As I say, client diversity is one. There's a bunch of others here. But if that's not something you vibe with or it's not something that you really care too much about, then we can't force people to kind of care about that. We can't argue against them and say, hey, you should care about this because it's really, I think, just a preference thing. But I think when it's tested is when it's most important. Like we had the OFAC sanctions against Toneira Cash, and that really tested Ethereum's claim to censorship resistance because I think people don't realize that these networks have always been censorship resistant, not censorship proof. And this goes

for every network in crypto, except maybe some of the privacy layers like Manero, for example, where it's default privacy, so you essentially get better guarantees because you don't know what's happening on the network anyway. So how can censorship happen? It still happens because you can have censorship at the centralised exchange kind of layer there. But we're talking about just the chain, right? And that really tested it. Essentially, what ended up happening is that 90 plus percent of the network was censoring TonnettaCash transactions at one point. And guess who wasn't? The solar stakers, right? Most of the solar stakers were not doing it. So they were the defense of last resort here. They were the final bulwock against complete and total censorship on the Ethereum network.

Now, imagine if the Ethereum network didn't have solo stakers. Imagine if it was only a big bunch of, I guess, like, beefy kind of stakers that are part of all these centralized companies. And you had, obviously, on the block builder side as well, centralization there. But when it comes to validators, they were the last resort because like 5, 10% of them weren't building their blocks with these block builders. They were building them on their own here. So imagine we didn't have that. You can imagine the counterfactual world here is essentially that there would be total censorship of tonata cash on the network or much closer to that reality. So I think if you actually look at the objective evidence that we already have, solo stakeholders are that final ballwalk against this.

And again, this is more of a kind of, I guess, preference thing, more of a long-term thing. Maybe you don't care that tonata cash is totally sensitive if you can trade your favorite meme coin still. That, again, is just a preference thing. But it has a lot of downstream effects. It has a lot of consequences. Because if you're building things on the network, it doesn't matter what it is. If you're building things and you think to yourself, well, I could be censored one day by the whole network simply because the government doesn't like what I'm building, then you're probably going to be like, maybe I'll go build this on a chain that actually has a chance of resisting this, essentially. So that's the way I kind of view it there.

But as I said, this is like a very long discussion. And we could spend the whole episode on this. But I think it does come down to a personal preference thing as well. Kyle Somani at Solana Breakpoint, or no, token 2049, made a presentation about why Seoul will eventually flip ETH. And summarizing that presentation down into just a few nuggets, it's more just like, look at the metrics, transactions are up, decks volumes are up, economic fee revenue is up. And then also Ethereum has just been so slow. The Ethereum project's nine years took them forever to ship proof of stake. What the hell were they doing?

They took them forever to find a scaling roadmap. and they picked a terrible one. So eventually, Salon will flip into ETH, mainly metrics and then timing. What would you say to this? I say hindsight is always a beautiful thing, right? You can look back and be like, why they take so long to do this? It's like, well, I mean, no one else was doing it, guys. Like, I mean, Ethereum proof of stake is extremely novel.

It's very different to the other proof of stake networks. I think people aren't aware of that. And it also took so long because Ethereum is a truly decentralized ecosystem. It was a coordination issue of getting all these people. people to coordinate and build this thing is a lot harder because of the fact that Ethereum started decentralized, very decentralized from day one, basically, especially by starting via proof of work, getting the community directly involved in mining. From day one, that was the principles there. So I think that's why a lot of things took long, one of the reasons, but also we had to invent a lot of

ways to do different things. And to be sure, Solana has also had to invent a lot of things to scale themselves up as well. They've got tons of normal technology that they've come up with themselves to benefit their own ecosystem. And to say that they're so far ahead of Ethereum, and yes, they're a younger network, but to say that they're like all the way over here, or even to compare things like, you know, Salina Proof Estate to Ethereum Proof State, I think is wrong, considering that they're just different beasts, right? They have to do different things. They're built differently and they're different ecosystems altogether. In terms of metrics, I think it's very dangerous for anyone to overindex on metrics at all. And we have very nice, I guess, evidence of that, nice, within the Ethereum ecosystem

where if you just take a snapshot of like 2021 Ethereum, just take a snapshot of that, look at the fear of a new, look at the activity, look at the, the DeFi volumes, and say, oh, my God, this is going to continue. It's like the disco stew meme of like, hey, the trends are up and it's going to keep going up. If you did that, right, in 2021 and assumed that, then you'd be in a really bad place, because all of those assumptions were completely wrong. That growth did not continue, obviously because we went into a bare market. The fair revenue came down substantially, not just because of the bare market, but because of the things that I mentioned earlier. And of course, Ethereum took longer to get the scaling stuff out, get the L2s live, get them mature enough to have cheaper fees and things like that. So

I really don't think people should be looking at the today's metrics or even like the last six months and extrapolating that out to the longer term. That definitely is not the case, no matter what it is within crypto, because things change very, very quickly. And I think Kyle likes to imagine that Solana exists to only compete with Ethereum when there are so many other competitors out there, like, as you mentioned earlier, David, there is Sui and Aptos and Say and Monad and Berrachan, all these other L-1s that are very serious about competing as well. They're not just like these scammy L-1s that are like, oh, we don't care about competing. You know, we're just going to do a token, cash out, whatever. I mean, I'm sure there's some of that. But like, they're very

serious about this. And they're not necessarily going to be competing with Ethereum because they're not a roll-up kind of, I guess, centric chain. They're an L-1, trying to scale up the L-1. So for Carl to be like, oh, it's just Ethereum that we're competing with. It's like, bro, like, look around you. Like, there's all these other competitors. You shouldn't be just indexing on Ethereum here. So for those reasons, I'm not going to say whether like Sol is going to flip Ethan on. I think that's like a wrong way to kind of think about it. But I will say, as I said, like over-indexing on metrics is always a very dangerous, dangerous thing and extrapolating them out. Metrics are fine.

We want them to be going up, but extrapolating it out as if that growth's going to continue into the future is a dangerous game, I think. By the way, have you guys seen the recent, like, mega-eath, like, projections in terms of transactions per second? It's just like dwarfs. Yeah. Yeah. It's like, isn't it like something like 10,000 transactions per second?

They're quoting 100,000, but I take, I take these things with a grain of sold because it's always fun to quote test net figures and internal figures and then you go on main net and you're like oh yeah i mean like we're doing a bit less but you can kind of see you could kind of see how the architecture if you go full like tPS and you're an l2 and you just kind of centralized sequencers and you go kind of like all in the way maybe is basically dialing that to max how like it's almost impossible it is impossible for an l1 to actually like exceed that from a transactions per second perspective. To take a kind of, I guess, I mean, and then there's intricacies here to here, but to take like

a note from the Salana camp where they like to say that, you know, Solanas is as fast as the speed of light, right? All of the validators communicated the kind of speed of light here. They process transactions at or near the speed of light because they're using beefy nodes, going over fiber connections, you know, 10 gigabit per second connections. And, you know, it looks like they're doing that to an extent. But then with the, with the L2s, you don't have that issue because you don't have consensus. You don't need to come to consensus on anything. So, as you said, an L2 can be super centralized.

And mega-ethysts claiming that they can have transactions that kind of go through in like 10 milliseconds or 1 millisecond, which is obviously far faster than the speed of light. But the way they're thinking about transactions and the way that Solana thinks about it, it's like, well, they're not technically finalized because they have to go through the Ethereum L1 pipeline. And I'm talking about finalization from a technical perspective, not from like an economic security perspective. So there are differences here.

Like that could be reverted for whatever reason. I have the sequencer level. Ethereum L1 blocks 12 seconds, you know, slot times of 12 seconds. So that's the long period of time there rather than what Salana has with 400 milliseconds target. So when you look at it from kind of that perspective, I wouldn't say it's like one-to-one comparison here. But at the same time, you have to look at like what users are doing and where users are and what their experience is going to be.

If they're getting a really amazing experience on mega-Eath where fees are just like dirt cheap, Fees don't go up. There's so much TPS happening there and it drives activity to it. They're going to go there as well, of course, right? They're not going to care about the underlying kind of stuff. Not to say that we shouldn't still build that. And as I just said, it's very important for us to prioritize decentralization here. But there are kind of tradeoffs here and the users are going to go where they're going to go. And I think we have evidence that users are happy to go to wherever gives them the cheapest kind of transaction fees and also has a lot of activity for them to do.

Like a lot of things to speculate on, of course. Okay. let's go to the group of criticisms that are more coming that I'm seeing from inside the Ethereum community at least like some members of the Ethereum community are kind of taking a look at all of this and saying hey like did we make a misstep with the roadmap and kind of dovetails on some of what we were talking about but let me sharpen these criticisms a little bit basically the idea is that it was a mistake to pivot so much in the direction of Ethereum layer two's. And like point taken that they're not parasitic, but if we outsource all of the defy,

if we outsource all of the execution, if defy itself moves off of the Ethereum layer one and goes to these L2s, well, that's going to take both the value accrual from ether, like ether the acid itself. And it will, it be a case of kind of the tailwags, the dog. It will, you know, like shift control and the nexus of power, the nexus of defy into these layer two. and away from Ethereum and be not like disastrous or maybe like net negative for Ether's ability to exist as a money. And this goes on which basically says that the Ethereum community is kind of naive to trust these L2s. You just like some of that. The L2s themselves aren't actually going to decentralize. They're not going to get to stage two. They're not insented to do that.

They like the sweet MEV fees. They're not going to decentralize their sequence. they're kind of in it for themselves. They don't have full economic alignment. And so the summary here goes, you know, Ethereum should get back to its layer one and make the L1 great again, make sure that DFI has a home on the L1 and not continue down the path of like increasing blob space and it's all about L2s and the roll-up centric roadmap. Yeah, so this is actual good criticism and well-thought-out criticism. This is not like your garden, I guess, variety fud, which is very nice and I actually agree with a lot of it, to be honest. I think that we did overindex on roll-ups and layer 2s. And I think that we should have more focus on the L1. But I think people are expecting

us to do to Ethereum L1 what like Salana did to their L1, right? And that's never going to be the case. There's just completely different beasts here. Ethereum L1 is not going to scale up execution like that. But in saying that, we should do more things to scale up Ethereum L1, especially for L2s, I think because it's not just blobs. We can add more blobs and give L2's cheaper fees here, but by scaling up the L1 in terms of increasing the actual L1 gas limit, we give more capacity to not just end users, but also the L2s. And by potentially doing things like reducing slot times from 12 seconds to even two seconds,

which is a big ass. But if we do do that, that is extremely beneficial to L2s because they get faster. Finale. They get faster kind of transaction inclusion guarantees. And we make base roll-ups better because instead of having to wait up to 12 seconds to get your transaction included. It's maximum of kind of two seconds there. And you don't have to use something called pre-confirmations as a stop gap there.

So I think from that perspective, absolutely we should be doing that. From an engineering coordination perspective, it's not an easy task. It is a longer-term thing. It is something that needs to be not only prioritized, but also it has to be data-driven. The way the Ethereum core development process works with anything is that they want to see data on things. They want to see how is this going to affect the network? How is it going to affect the bandwidth usage of the network, which is a big concern overall for the Ethereum L1? How is this going to affect users? How is this going to affect apps? How is this going to affect people storing

the chain and retrievability of it? There's all these things that we care about as an ecosystem that are prioritized and then we can think about doing this stuff that people want to do. So I think that from that lens, the reason why it may seem like we put too much emphasis on the L2s is it goes back to my former point where I said that they move a lot faster. because they're smaller and nimble. They don't have to go through this process necessarily. They have their own kind of process that they go through there. And that's why the L1 has naturally moved slower.

And we'll always move slower than the L2s, I think. But that's not to say that we shouldn't put more effort on the L1. And there has been a lot of teams working on this, not just at the protocol level, but also at the client level. The execution layer clients, such as Nethermind and Reth, are pushing very hard on scaling themselves up. Even if the network itself isn't doing that right now, even if the network itself, like the protocol is limited in what it can do, the clients are right,

they're ready to go. Like if we want to increase the scalability, the clients can handle that, right? If we want to increase the gas limit, the clients can handle that. So they're already working on this stuff. And then eventually when it goes through kind of like the protocol level stuff, we can do it and do it safely. So I think that that's critically important to keep in mind, is that we need to do it safely because I think one of the worst case scenarios for Ethereum is moving too fast at the L1, breaking something, and then all the L2's going to be. go offline as well. People don't realize that. The L2s go offline when the L1 goes offline. I mean, offline is a term you can unpack here, but essentially they rely on the L1 and goes back to the parasitic

symbiotic thing, right? So if the L1 goes offline or if something bad happens to the L1, it has massive downstream effects across the entire ecosystem. And that's why we prioritize stability over this scalability. But we can still do more at L1. I completely agree with that. I've actually made this point on Twitter before. You know, if the layer one goes down, all the layer two's, I think I said the words go down, which is actually technically not perfectly true because the layer two blocks will still produce. So maybe you can kind of suss out that point because the layer two's, they will still produce new blocks. You can actually put more transactions into the layer two blocks. So what do you mean by the layer twos go down? Yeah, so it kind of like is

easiest to illustrate when we think about assets. So, for example, if the kind of L1 goes down and your asset was issued on the L1, let's say you have ETH, ETH is issued on the L1, it's not issued anywhere else, and you've bridged that ETH into the L2s, that ETH is now worthless if the L1 is offline, because there is nothing backing it. It's essentially an I owe you, as I said before, but essentially you've got no collateral backing that ETH. So if you're on L2 and you're saying, well, I can still kind of move my funds around. There's blocks being processed. I'm going to send some funds to a centralized exchange and cash out, send my ether there. The essentialized exchange is not going to honor that because there's nothing backing that now. That's just a

worthless token that they don't want. But if you think about something like USDC, and if that is issued, even on the L1, but if it's issued on the L2, especially, a circle can just say, well, this is the balance of USC and this person's address. We have the collateral in a bank account, it's not on Ethereum L1, we can just zero it out on Ethereum L1, replenish this for our users, and just redistribute it out. So essentially, there's no net loss there of the asset. But every natively issued asset on the L1 would become worthless on the L2 because you can no longer access the actual asset. So that I think is the cleanest way to explain it. Then there's a lot of intricacies about what happens to D5 positions, what happens to like NFTs downstream of that, right?

What are they worth now that you can't unwind them? or you can't kind of settle them down. And then obviously you lose all your sediment guarantees now. Like you're literally just like a completely centralized server. There's no proof that anything happened on the L2 or on the L1. There's no verifiable proof of that. You're literally trusting the L2 to do what it says. And there are other things that fall into this.

It really does depend on how the L2 is constructed and what stage they're at in terms of decentralization. But the asset thing, I think, is the thing that people drive with the most, is that you're not getting your ETH back if Ethereum goes offline because there is no, you know, isn't there ETH anymore. Like Ethereum's offline. It's gone and it's worthless now. Yeah. I think the point really to illustrate to drive home is that sure, the layer two blocks can keep on producing. But if the property rights is severed between the layer one and the layer two,

then just like you have the silo database that's not interconnected with the rest of the ecosystem. So yeah, so like Jeremy Aller could reissue you your USDC. But like what are the odds that the L2 is going to just kind of come back online and fix itself? Yeah, it's before he does that. Yeah, you're just going to have to just wait for the link to be established, reestablished between the layer one and the layer two. I want to turn the conversation to some concerns that the market might have, call these non-tribal neutral investors who are just looking to place bets in the space, and they might see ether being squeezed between Bitcoin's money narrative and Solana's D-Gen, EasyUX, and Revenue Positive, Layer 1. The Bitcoin ETF inflows our gargantuan.

the eth, eth inflows into the ETFs haven't actually been able to outpace gray scale outflows. And so we're actually still negative with the gray scale outflows. Meanwhile, Solana economic transaction fees are rivaling the Ethereum layer ones. So Bitcoin on one side, getting the strong money premium. Bitcoin definitely money. Solana definitely getting the revenue. Ether, kind of money, not much revenue. So getting squeezed.

How do you think about this? I think Ethereum and ethers an asset, they've always been the, middle child of the ecosystem, right, where you have, like, ETH trying to compete with BTC as this money store of value that naturally makes the Bitcoin is not like Ethereum and ETH, and they already don't like Ethereum and ETH for other reasons. So they naturally attack it, discredit it, so on and so forth. And then you have the other side, which is the L1 competitors. And they're directly competing with Ethereum for, as you mentioned, like things like transaction, fear revenue, D5 volumes, user activity, stuff like that. They're not necessarily

competing with ETH to be money or they're not even trying to do that, whether it becomes money. it's up to, I guess, social consensus, but like they're not directly competing on that front. But that's something they don't need to do because Bitcoin is handling that. So it's like this pincer attack where it's like, okay, you guys come at ETH as the money thing. We'll come at Ethereum as like a better platform because we can do more fear of when you have more activity. And we'll just like spread so much fud about Ethereum that people will think it's dead when it's worth $300 billion and it has so much user activity still. And it's growing, you know, so on and so forth.

It's actually, I just like I very much identify with that. like this is why it feels like everyone hates Ethereum sometimes, right? It's like, I mean, it's not in our head. It's almost always been like this. I remember when it was like other, you know, blockchain ecosystems where there's like Bitcoin and Cosmos where Cosmos said it's doing the app chain vision, but Bitcoin is like our money and our atoms, you're like money. No, of course they're not money.

We're just trying to build an app chain network, right? So there was this alliance between like Cosmos and Bitcoin. And it's always been pincor attacked. And I guess that's why it feels like it's a hated asset from like across all the tribes. Yeah, exactly. And I think it's impressive that even in the face of that, it can be still worth what it is. Ethereum still is, I believe, the biggest kind of ecosystem within crypto in terms of like to build within.

It's still growing, like hugely, actually. Like, the L2 is absolutely killing it right now in terms growth. The L1 still has usage, you know, contrary to popular belief. It still has like $44 billion or something worth of TVL. Like, it's still a home to a lot of capital. a lot of defy, a lot of stuff going on there. So I think that even in the face of all of that, like Ethereum has just, you know, gone through that,

has persisted through that and has been able to deliver things that people actually find valuable here. But I think that that kind of pincer attack is always going to exist because, yeah, you're stuck between those two camps. And those two camps are quite, quite strong, if I'm being honest. Like, especially the Bitcoin camp, like, because of the fact that BTC is worth a lot and Heath hasn't outperformed BTC over the long term. And as you mentioned, like, ETF,

flow just reinforced that kind of narrative there, it becomes a lot easier for that to stick for people, where people are like, well, Eath failed at being money. It's all BTC now. So, you know, screw Eith. Ethereum's cool, but like, screw Eath sort of thing. Where I believe, as I said before, that's more of a shorter term outlook. I believe if you look longer term out, I think that Eith still has a very strong shot at being, you know, potentially worth as much as BTC or if not dethroning it. I'm not going to use the F word here. But that's how I, if we look longer term out, because I've always believed that like, yeah, you can have that social consensus around something being money, a story value, which is incredibly powerful. But then to grow that beyond just a social consensus to use

kind of like objective measures, you need to have like the user activity to back it up. So I'm not talking about things like fear of and you, anything like that. I'm talking about what I said before in terms of increasing the network effect of ether as an asset, because money is just a network effect at the end of the day, right? The more people that hold and buy an asset, it's worth more. Even if you look at something like a fiat currency like USD, for example, there isn't it's worth more than everything else. So every other, I guess, like fiat currency in the world, if you actually chart this out, you can see this over time, is not because it itself is like a good store of value or a good asset to hold against maybe gold or against BTC and Eath. But it is against other fiat currencies because it has the strongest network effect, right? It is like a reserve asset.

It is used everywhere. People in countries like, and it is backed up by a really strong economy as well, which is, I guess, guess like the point that I'm making about, the Ethereum economy backing ETH as an asset, as well as Eith having that social kind of monetary premium store of value story around it. So I think while we're getting PINCSA attacked by two different kind of tribes, we're also PINCAR attacking the money. And we're basically saying, you can do both. Attack the money use case, get it from social consensus, but also get it from economic activity. New projects are coming online to the mantle layer two every single week. Why is this happening?

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Start swapping smarter with Uniswap. Yeah, what's interesting is like, Ethereum has always, I guess, fought against Bitcoin's monetary narrative. And Bitcoin certainly had a strong, even stronger monetary narrative relative to Ether in 2019, as evidenced by like the ratio. I mean, that was a really low point in the ETH Bitcoin ratio. What feels a little bit different this cycle is the strength of the Pinser attack from all the alternative layer ones, at least at this point in the cycle.

And so at least going into kind of like 2021, you like in 2020 and onwards, Ethereum had sort of the big exciting on-chain use cases. Like it had defy. All the exciting things in NFTs and kind of the cultural narrative were also happening within the Ethereum economy as well. One thing it didn't have is kind of this algorithmic stable coin narrative. And, you know, Luna and Tara took that and like they took it to their grave. but like it had the bulk of all of these use cases. And I'm wondering if this time around in this cycle, you see a stronger cohort of competitors

in some of these alternative layer ones in particular Salon. I'll say that the average investor who looks at this uses this to kind of justify the barbell approach of like all I need is a crypto money and I'll pick the number one, which is Bitcoin. And then I'll bet on these fast layer ones, like alternative layer ones, primarily Salana, et cetera. And so they do Bitcoin and the L1 overweight Salana plane. They skip

ETH altogether. Do you think it's kind of different this time? I do think it's different in that like we do have serious competitors, you know, this kind of time around. Like I'm not going to sugarcoat that and say that. I don't think they're serious competitors. They definitely are and objectively are as well if you measure it by what's been going on in the ecosystem, which I think is great, honestly, for Ethereum overall, it pushes us harder. The competition is not a bad thing. But in terms of like the barbell strategy or the kind of, I guess, like a money strategy or where to invest your money, I think if you look at it from like a barbell perspective, you kind of map this out towards logical conclusion of, well, if one side of the barbell is the

money and the other side is like maybe your tech growth kind of thing, then that tech growth thing is just going to go through cycles of being replaced by something else. Because if you're trying to get upside in an asset, right, you're not going to go for the assets that are already big. Like if you're going for the growth upside, you don't want to bet on assets that are already huge in market cap. Like BTC, you're not betting on as a growth asset. You're betting on it as a store value as a money. It's going to go up slowly over time compared to other things. And then you bet on like the hottest new tech play. So that will always get rotated out. So you're always changing that side of the barbell. So I think from that strategy,

that's not a long term strategy for the other side of the barbell. It's good for BTC, but that other side is always going to be rotated out for something else. So I think that ETH needs to just worry about the BTC side. I don't think ETH necessarily needs to worry about the tech growth side because of the fact that we were already on that side of the barbell at one point in time, right? We were there and then we got rotated out for something else because ETH matured as an asset, it got bigger. It is no longer something that looks like a pure kind of growth, like massive growth kind of tech play.

It's more of a, you know, more closer to BTC. So I would say that if it's a barbell analogy, ETH's kind of sitting in the middle right now, right? and it's trying to edge closer to the BTC side. That's what we want to be. We don't want to be on the left. Because as I said, the left gets rotated out and ETHs already been there and been rotated out. So we're trying to push ourselves to the right side, which is the BTC side there. So I think that as long as we can keep doing that and as long as we can keep reinforcing that,

as I mentioned, via economic activity, but also via the story of ETH's money, I think we can eventually succeed there. But yeah, it is a long-term bet. There's a lot of unknowns here. depending on the type of investor you are, you're not going to allocate to ETH if you're just in it for the growth play, or if you just want to be really, really safe and say, I'm going to go into BTC because that to me looks like it's already got everything. It's going to go up only from here. It's got the ETF inflows, so on and so forth. But again, the upside is very limited there in terms of like, I mean, you're going to still get upside, of course, but in terms of other things,

yeah, it's going to be the least upside you're going to get, basically, I think. Anthony, a bit of discourse that's been going around in crypto Twitter. lately, is Ethereum's lack of North Star, or maybe it has a North Star, but no one can articulate what it is. Bitcoin has a North Star. It's Digital Gold. Salinas North Star is decentralized NASDAQ or consensus of the speed of light. What's Ethereum's North Star? Or does it, is it a problem that we can't really articulate one? I go back to what I said earlier about getting involved in these kind of like bike shedding arguments. And for those of you don't know what bike shedding is, it's basically this phenomenon of like when you have a group of people

together and you have to decide on something small, it becomes like this huge thing. And the analogy is what color should we paint the bike shed? And there's like 10 people deciding this. Everyone's going to just keep going in circles about what color to paint it if there's no, I guess, leader or no coordinator to have that final decision. Because if everyone's got the same say, then everyone just keeps going in circles. I think that's what happens with these North Star discussions. Because Ethereum is such a decentralized ecosystem, there is no single person or single entity that can define what Ethereum is. Like, originally Ethereum had this, I guess, tagline of being the world computer. And that came from the early Ethereum kind of people where it was much more centralized

because it was just starting out, like this world computer thing. And that didn't stick at all because it didn't really make sense on the surface. Like someone thinks of a computer that don't think of something incredibly slow like Ethereum L1 is in terms of compute power, right? And it was mean to death, essentially. don't use it anymore. But another reason why we don't use it is, well, the reason we don't use it is because of that social consensus of we don't like this thing. The more decentralized Ethereum became, the more people rejected that description of Ethereum. Then we had meandering through

a bunch of different things, like Ethereum is the new internet, for example. Ethys money is another one, which is obviously just for the ETH the asset, not Ethereum the network. Bitcoin went through this too, mind you. It started off as peer-to-peer money. Now it's digital gold, right? And now the money thing isn't even discussed at all. People are saying, no, no, you don't use your BTC as money. Like, you keep it. It's a store of value. So it's just a social consensus thing. When it comes to decentralized networks, it's not something that you're going to be told what it is. And I think the same is going to happen in Salonra as time goes on as well. Like, yes, today it's decentralized NASDAQ or finance at the speed of light. I've seen

another one. But that's already two. That's already like more than one. So the bigger that ecosystem gets, and the bigger any ecosystem gets, the more you're going to have this fragmentation of of a quote-unquote North Star. So I think that the premise, again, is just, like, flawed. It doesn't really have any kind of meaning here. But what ends up happening is when you have, like, an absence of this, is you essentially have a social consensus on what a thing should be. And I think within Ethereum, even though we haven't got, like, one thing to point to,

we've coalesced around this roll-up centric roadmap of essentially keeping Ethereum, L1, decentralized, and then scaling via L2s. That is the closest thing I think we have, if we're talking about Ethereum, as a platform. And that came naturally. Yes, Vitalik originally proposed the roll-up-centric roadmap, but that was after people had already been working on it. All he did was say, hey, like, this seems like the roadmap that we've always wanted. Here it is. And then people coalesced around that. And there had been some kind of like splinter factions, so to speak, that say, well, no, we need to scale the L1 more. Or no, the roll-up centric roadmap was a mistake. But that's fine.

There were splinter factions in Bitcoin, too. No, we don't believe that Bitcoin's block size should stay limited. We're going to fork off as Bitcoin cash and go be money, right? Or go do this or go do that. So that exists. But as long as the core remains the same, I think that that is really the North Star in the end, the social consensus around that core. So I think while Ethereum doesn't have a tag, taggy, kind of like meany, fun one liner to describe it, it has social consensus around a path. And we've been on that path for four or five years now. And we're going to be on that path for more years than that, probably until the end of the decade to really realize this vision. And I've just seen that strengthen over time. Obviously, because we have

L2s, we have L2s that work. They've gotten cheaper. We're improving the L1 for the L2s, so on and so forth. So that's generally how I view that. But going in circles around trying to find a one-liner to describe Ethereum is just going to, yeah, it's just bike shedding, really. I would love for people to, like, if you ask the question, what's the internet's North Star? How would someone you, like, possibly answer that? It's like, it depends. What era of the internet are we actually? Exactly. It's so general purpose that it can do.

It's like so many things. It's e-commerce and then it's like email and then it's like, you know, social networks. And now it's like AI. It's so many different things at once. I do agree with you, though. Ethereum does have a North Star with respect to its roadmap. Like having been in Ethereum for like some time, I don't think I've seen the Ethereum roadmap as clearly articulated as now.

I mean, do you remember back in like 2018 when it was very unclear, it was very unclear? what the next steps were to accomplish that this entire vision was, and now it's like much more clear. That's putting it nicely. Yeah. If I look back at 2018, it was a mess. It was a complete and total mess. Like, I don't think people realize just how bad it was. People would like to say, oh, sentiment is so bad right now for Ethereum.

It looks like Ethereum's dying, whatever. That's obviously all untrue. But like, a lot of those people maybe weren't around in 2018 and even 2019. Sentiment was within the core Ethereum group was actually pretty good because we believed in what we were building. you know, we had confidence in it. But outside of it, Ethereum was written off as like completely and utterly dead. And it actually looked like it too, right? It actually looked like it.

But yeah, and as you said, there was no roadmap really. Proof of State was completely up in the air. We had no idea what was going on with that. We had no idea what was going on with anything else, really, like shardening as well. I remember we thought we were going to ship Proof of Steak as a smart contract, right? Exactly. I felt like we were months away from that. And then the whoops, nope, not anymore.

We're totally shifting that idea. Yes, exactly. They literally, I don't think people realize, but with proof of stake, they literally completely pivoted the roadmap. All the old work was discarded. I think only a few things from that old work were kept. Everything was discarded. They started from scratch.

And they launched it as a new chain. And then we did the merch. Like, the amount of kind of things that had to go right for Ethereum to even get to where it is today is insane. And I think that gets lost in the source. People don't realize all of the things that Ethereum has achieved so far, which spoiler alert is going to be part of my bankless. Summit talk because I feel like it's worth reminding people of this stuff. And then they look at just the present, which is fine. Like the present obviously is important. But I think learning from the

past, seeing where we've come from and getting confidence from that, looking at the present kind of state of things, maybe changing course where we need to and then looking out into the future and seeing, okay, where logically is this going to go? And I think Ethereum has never been in a better position. Like it's objectively true that we've never been in a better position as an ecosystem. Yes, we've got better competitors, but that's fine. That means Ethereum's going to be better. And it already is playing out where the L2s are like, well, screw you, we can do what you can do and better. And they're marketing this out there and they're actually putting it live on the network. Base is scaling every week. They're actually increasing their gas limit every single week. They're scaling up. They're doing so much TPS there. The OP stack is killing it. I'm going on a rant here right now. But in terms of like getting all this stuff happening on the network, yeah, there's never been a better time in Ethereum in my opinion. Okay, well, we've punched down, you've punched down some of the critiques here. Let's get into the bull case. I think you've articulated a lot of it. Now, I want to ask a more targeted question on the bulk case for ether, the asset, and Ethereum, the network. Are there any bull catalysts ahead of us? Like, what do you see that's kind of exciting? I mean, you mentioned based roll-ups a little bit earlier. Of course, we're not done the L2 roadmap, and we're going to continue to expand blob space. But when you look at the roadmap and what's ahead, are there any bull catalyst that you see for Ethereum?

Yeah. So I think people always like to rally around some kind of big catalysts, right? Like EIP-1559, the merge, the beacon chain launch, so on and so forth, which is great. It acts as coordination kind of thing where everyone. We've got to keep hope alive, right? I remember my last bull catalyst for Ether was like the ETH. And like that didn't like fully materialized. Now like maybe that's a sleeper.

Maybe that'll age like a fine wine and that's the hope. But like you kind of have to have something to look forward to. Yeah, I think so. But then you can also look at Bitcoin and it's had nothing to look forward to for ages and done just fine. Right. So you know what I mean? Like the ETF was the last big thing that they had to look forward to really in the last few years. Like there's really been nothing else because they don't change the network.

There was a little bit of energy around ordinals, but that seems to have faded a bit. not to say it's gone away or won't come back or whatever, but most people in Bitcoin are interested in that, right? They don't even talking about that. So I think if you look at that as a counter example, you don't necessarily have to have something to always look forward to. But if I'm being totally honest here, I don't think there's anything as big as the merge,

for example, down the line in terms of like one singular event that everyone can rally around and that's like this big, huge thing that's coming. But there is a lot of kind of incremental stuff over the next few years. a lot of stuff just continuing to happen because Ethereum is now a mature ecosystem, because we've got a lot of the kind of puzzle pieces in place now, we can just keep building on top of that. So it's more of a snowball effect where the snowball just keeps getting bigger and bigger and bigger over time rather than having like the big snowball that's sitting there for you to go

play with sort of thing. So that's how I'm viewing it. Now, if people actually look at the roadmap and this is timely because Vitalik just put out his final blog post of a six-part series of the Ethereum roadmap, he describes each part of, of the roadmap and then what the goals are for that that kind of area of the roadmap and then what that actually means for developers and users so on and so forth, scalability and stuff like that. So I highly recommend people go to Vitalik's blog and read all of those. But among those things, there is, again, not like this big thing, right? There's not this big event because they're all happening in parallel.

So they're not sequential where it's like, okay, well, this part of the roadmap happens now. Then in a year's time, this one will happen. It's like, okay, part of this roadmap happens now. part of it happens now as well, but part of it happens later, so on and so forth. But again, it's all kind of like just overall improving the Ethereum ecosystem, improving the Ethereum network. And I right now can't see like that one kind of big thing anymore, which again, as I said, I don't think it's necessarily an issue because if we look at Bitcoin, it hasn't been an issue for them. I know that the premise is different here in that Bitcoin doesn't do anything.

It's literally just like a story that, you know, in a social consensus thing about it being a money's thorough value. But I think that that is the same for like ether as an asset, like as we've discussed before about Heath being money. Also, the Ethereum network, if you believe in the roll-up centric row map, if you vibe with that, if you think that L2's are awesome and they're going to keep growing Ethereum as a network, which I think that we can all agree on, it has been the case so far and seems like it should be the case into the future. Again, not extrapolating out certainty, CR, but we're all about taking bets. That's what investing is, really. It's about taking bets on the future, essentially if you believe all of that, then you believe that the

Ethereum ecosystem is going to grow dramatically from here. I may say the word incremental, like it means like small little things, but in terms of growth, I think that we've got like, you know, thousands of times, tens of thousands of times growth ahead of us, because we've barely onboarded most of the world into crypto. People say, oh, well, there's 100 million people, whatever, that own crypto assets. Okay, cool, but how many of those people are on chain? Because the majority of them are not on chain. They're in centralized exchanges. And this is actually one of the thesis is for Infinex, which is Kane's new project. All these people are on centralized exchanges. They do nothing else. They're not on chain. They never go on chain. They sit there.

Their actual users, they have the assets, let's give them a way to use them. Let's let them do stuff with these things. And if we look at it from that perspective, the entire industry, not just the Ethereum, to be fair, the entire industry is growing, like the on-chain industry is going to grow so massively from here. So while the actual, like, I guess like upgrades to the Ethereum network and to the L2s may seem more iterative in that when, not going to be having this massive kind of event to look forward to. But we do have to look forward to is onboarding billions, literally billions of humans and trillions, if not more, of machines. That's another thing that's become a big theme lately, but something that I know that you guys

have talked about for a while now, about these machines coming on chain, these AI agents, like actual AI agents, not just AI dressed in a five-person trench coat, right? Like actual AI. So if you look at it from that perspective, there's no reason not to be bullish. And Unless you think that the L2s aren't going to capture this activity, that Ethereum isn't going to capture this activity, then that's the reason to be bearish. But from where I'm sitting, that doesn't seem to be the case. It does seem like the L2 momentum is very strong and it's kind of like a snowball rolling downhill at this point. It's like with Cracken just last week, like all of the major centralized exchanges now have L2 strategies basically. Anyway, that will continue to kind of roll downhill.

and I think a lot of the trends you're speaking to are just moving forward at an accelerated pace. One, this episode will come out after an episode, the day after an episode that we will release with Justin Drake. And the episode with Drake was all around based roll-ups and kind of the future and why he's kind of bullish-based roll-ups. I remember we did an episode earlier with Max Resnick, who's kind of critical of the Ethereum Layer 2 roadmap. He wants to, quote, unquote, make the L1 great again, even to the extent of, like, if we have to sacrifice solo stakers, that was his take, not like our take. But anyway, we asked the question in that episode, hey, Max, if all of the L2s overnight were converted to based roll-ups, meaning that they used Ethereum validators for sequencing rather than a centralized sequence, or would that kind of solve the L2 alignment problem that you're talking about? And his answer was basically like, yes. And so I want to ask you this question.

Do you think that based roll-ups are going to be, I'm not going to say a silver bullet, nothing's a silver bullet. But do you think that this will solve some of the outstanding issues that Ethereum is perceived to have with L2 alignment and even like problems like liquidity and fragmentation and keeping defy on the layer one, all of these things? How bullish are you or optimistic are you on this technology? Yeah, I would say that obviously Justin's going to dive deeper into this on that episode. I mean, as you said, this comes out after that. So people will have learned a lot about based roll-ups from him. He is like one of the champions of it. I would say from my understanding of them and from all the research that I've done,

as you said, isn't a silver bullet, but is like really fucking cool. Like part of my language there. But like, when you look, it's really cool because not only does it tightly couple the L2s to the L1, So it actually not only on the surface, like in terms of like talking about it, but actually feels like one kind of united Ethereum ecosystem. Like you're under the Ethereum umbrella. But it drives more revenue to Ethereum L1. So people who like to see more revenue, like to see those numbers, like to see that direct value accrual to eat the asset and to the Ethereum network. That's better for it.

You get better interoperability between the different kind of layer twos and roll-ups here because of the fact that they're sharing, I guess, like a sequencing layer on the L1. And you get access to the most decentralized validator set in the world. No other validator set is as decentralized as Ethereum's, not even Bitcoins, because Bitcoin mining is very centralized. People maybe don't realize this, but it's quite centralized. And if you look at Ethereum's kind of validator set, as you said, like Max maybe has this opinion that we should kind of maybe sacrifice solar stakers. I don't think that should be the case at all because that's what gives us, as I went to my previous point from before, that's what gives us our strength as a network. here. But it's not just a solo stakers. It's the hundreds, if not thousands of other entities that are staking on the network as singular entities here and providing that infrastructure.

And then you can throw like eigenlayer into it as well, like getting Aveses involved and doing things like not just on the roll-up side, but things like oracles and stuff like that. So you're basically just like tightly coupling the ecosystem again. So essentially instead of it feeling, because it does feel fragmented, right, like to the end user, it does feel like when you have to bridge between different layer twos and stuff like that. I totally understand that. That's, that's an issue that the entire ecosystem is actually focused on solving, by the way. Like, this is not something that we're just looking at and being like, oh, that's not an issue. It's fine. We'll just ignore that and do this other thing. No. Like, I mean, today, just today there was a Twitter

spaces with all of the major L2 builders, or most of them talking about how to better interoperate. And it's actually in their best interest to do it as well because of the fact that they're stronger together than they are apart, much stronger together than they are apart. It's like doing alliances between nations that don't like each other, like economic alliances. It's like, okay, I don't like you. Your culture doesn't vibe with my culture, but hey, we're both interested in an economic alliance here. Let's put aside our differences because we're stronger together than we are separated.

Because if we're separated and we're on our own, if you form an alliance with the other people that don't like me, then I'm on my own. And I'm here like, oh, shit, like you guys might invade me or something if we're using the nation state analogy here. So I think the same is true for blockchains where it's like, wow, if we don't unite, if we don't unite under one umbrella, like Ethereum, if it's, don't tightly couple ourselves to Ethereum L1 as L2s, we may just find ourselves in an isolated island. We won't get the economic activity that we want.

We won't get the liquidity, the TVL, the users, and we'll basically lose because of that. You could have like the best technology, but because you haven't actually played nice with the entire ecosystem, which is your incentive if you want to grow, then you end up in an isolated kind of place there. So that's kind of how I view it. But to have, to Max's point, because Max is very big on pushing the L1, as you mentioned, to have good-based roll-ups. And when I say good-based roll-ups, I mean like based roll-ups that can get as close as you can to the same guarantees as transacting on L-1. You need to do it at the L-1 slot time.

And what I mean by this is that you need to have your transaction included as part of an Ethereum L-1 block, not on a pre-confirmation. So maybe I, Justin's going to explain this, but I just want to reiterate for people. A pre-confirmation is basically a promise saying there's these people that run this software and they're like, and they put up like a collateral bond. And they say, Well, I promise to include your transaction in an Ethereum L1 block. It's sometime in the future because Ethereum L1 block right now or slot technically is 12 seconds. So if you want to get your transaction soft confirmed in like one second, that can't happen just going to the Ethereum L1.

You have to wait those up to 12 seconds. Whereas a pre-confirmation can be as fast as the speed of light, basically. But that's a promise. It's not confirmed until it's actually in the Ethereum L1 block. And on top of that, it's not actually finalized on Ethereum for like 13 and a hundred. half minutes. So there is still a potential of a re-og, that's what we call it there. But to Maxis point, reducing slot times to like two seconds, which as I said before is a huge thing, it's not something that we can do overnight. But reducing slot times from 12 to 2 is massive because of the

fact that now we don't necessarily need pre-confirmations. Like if a user has to wait like up to two seconds to get their transaction included on an L1 block, I think that's fine. It's the same as loading up a website. I'm happy to wait a couple of seconds if I have to, right? I'd rather not because you know, there was short attention spans these days. But like, if I had to, that would be fine. But then print confirmations are still a thing. And they become even stronger because now instead of having to wait like 12 seconds,

you wait two seconds. And then also there's the opportunity to do single slot finality. What this means is finalization at the two second mark. Like it's a huge kind of lift here. But essentially you get finality within two seconds. You get your contract. I actually confirmed. And then basically what it means is that you get the best possible guarantees you can get

as a roll up on Ethereum, rather than doing things with your own sequencer and putting all these bridges in. And then the users feel safer. The big capital feels safer. People tend to think that people don't care about this. I'm telling you guys right now, well, not you guys, but like the audience, it's like the big capital absolutely cares about this. Like they look at everything. They look at every single thing about an L2, about the L1s, about where to put their money, what small contracts interact with. Because a lot of the time it's not their money. So they don't have the luxury of just yollowing. They're not an SBS. who like it's not you know it's it's it's him just like putting a customer money into things no no a lot of

these outfits are serious like the black rocks of the world are not going to just throw their money into into some random thing that they haven't researched so if you look at it from that perspective having a base roll up just gives you the best of kind of like all worlds not a silver bullet not going to be for every single use case because there are limitations here because you're basically not exactly limited by the l1 but it is it does place a limitation on you but you get that that that interoperability that essentially better censorship resistance and liveliness because you're now part of the Ethereum Validator set. And it's just a huge unlock.

And I'm sure Justin explained all of this already in more detail. But yeah, to say I'm bullish on Betrolops is an understatement. I'm very bullish on them. But the reason why I think that I'm not talking about them too much yet is because they are a little bit further away in terms of getting them to maturity. The two second slot time thing may not even happen. Like there's a chance that it won't happen because it may be too heavy of an engineering lift. and then people will be like, well, pre-confirmations are fine.

You know, let's just do single-slot finality of 12 seconds, and then in the slot time, and then essentially what you get is the pre-confirmations up to 12 seconds, then you get finality. And that might be good enough, right? Quote, quote-unquote, good enough, rather than re-architecting the Ethereum Protocol to handle this, because it's not just the protocol,

it's the people running nodes, it's the stakers and everything, because now you're increasing load on them, and yeah, it's a heavy lip. In saying that one last thing, you don't have to go from 12 to 2. You can go from, like, 12 to 8. eight to six, six to four, overtime. And yeah, maybe more engineering work to do this, maybe more coordination. But by doing that, you don't have those risks necessarily.

You can be like, okay, well, we've been running on eight second slot times for like six months and everything seems to be okay. Maybe we can lower this to six. So what we've done with blobs. We're running on three blobs since March. Network's been fine, I think. I don't, like bandwidth usage has gone up,

but there's work being done there. But people are like, okay, well, maybe we justify to increase blobs to four or five in the Petra Hard Fork. We need them. We need them to scale the altos. And network seems to be doing fine. So let's do that. So as I said, iterative things that snowball into a massive kind of thing for Ethereum.

Anthony, we've covered a lot so far on this podcast. We've covered the different ways that investors look at ETH. We cover the economics across different layer ones and the layer two model. We covered moniness. We tend to cover a lot of things when we talk about Ethereum. There's like 50 different lenses for viewing Ethereum from 50 different lenses from 50 different perspectives. Theorem is kind of a prism.

Actually, it is its logo. And that kind of presents a marketing problem, because when there's so many different ways of presenting Ethereum, telling the story of Ethereum can become difficult. So how do we tell this story to the world? How do we get the world to understand Ethereum? How do we get the world to care about Ethereum? How do we solve, like, Ethereum's like marketing problem? Yeah, I think it's a difficult problem to solve because of the reasons I outlined for,

like, the North Star problem. Like a North Star is really like a marketing vehicle as well. It's like something you can point for all your other marketing to fall off of. But because Ethereum is a properly decentralized, distributed kind of ecosystem with thousands, tens of thousands of different participants, it's very hard to kind of agree on or I guess like coalesce around a marketing strategy, so to speak, right? Or a communications PR strategy. It's very easy for centralized companies to do this, obviously because everything's in-house. There's a top-down approach here.

But Ethereum is a flat kind of organization. There is no central figure, well, there is no central figure that asserts its influence because there's been a lot of discussion recently about the Ethereum Foundation and say, hey, the Ethereum foundation should be doing this. They should be doing more here. They are like a central figure within Ethereum. They have the influence. They have the money, of course, as well as everyone has been talking about, like they have a lot of money. But people are kind of saying, yeah, they should be doing more here. Now, from that perspective, I think people don't realize that The Ethereum Foundation isn't built like that at all and hasn't been built like that from basically

day one, especially over the last five years where their philosophy is to push this stuff out to the community to do and fund those efforts via grants and things like that, which they've been doing, to be fair, like they've actually kind of completed that mandate. But then there are smaller things like the Ethereum account on Twitter barely gets used. It has millions of followers and it's never used. And I think prior to the ETF, this was mostly a regulatory and legal thing where I don't think that they wanted the Ethereum handle to promote anything necessarily because it would maybe lend the SEC some arguments they could use to classify ether as security and then other kind of

legal and regulatory stuff that falls off of that, of course. But in a post-Eth ETH ETF error, where ETH is a commodity now, like it's objectively a commodity based on the evidence. It doesn't matter what the SEC says anymore. They approved the ETH ETFs based on ETH being a commodity. It's there. It's trading. It's out there. Everyone agrees at this point that it's not a security, except the Bitcoin Maxis who like to call it as security. But, you know, everyone's sane. So from that perspective, I believe that Ethereum's marketing kind of efforts can be a lot more aggressive. And I believe the Ethereum Foundation can actually not necessarily do it themselves, but maybe change their stance a little bit and say, hey, okay, let's maybe give the Ethereum Twitter

account to a group of community members, long-time trusted community members that can manage it, and we'll put a set of guidelines out. It's like you can't promote this, you can't promote that, because you don't want to be promoting scams, obviously. Promoting individual projects is always a funny thing. But maybe that account can tweet out things about the layer two roadmap. Can say, okay, here's a nice explainer on what the roll-up-centric roadmap is. Here's why, you know, here's a nice explainer on what ETH is as an asset. Here's what's coming through.

Like shit like that, like important stuff like that, basically, right? So not necessarily promoting individual projects. And that, I think, would be an easy win and a huge win for the community. And I actually put a proposal. forward, not a proposal, but like I put a comment forward on Twitter where I said that the easiest way to do this is just to have like one EF member, one to two independent community members, and one person from maybe like a major Ethereum kind of company, maybe consensus or something, that is part of that management team for that account. And then they can, yeah, have their guidelines and follow

them. And there you go. That's an easy, easy kind of win there. And then on top of that, I think the Ethereum Foundation could potentially fund an effort that is focused on purely marketing PR, but like using world-class teams for this, not just the community. The community is fine, but if you want to actually do proper marketing and PR and communications, you have to hire people that are specialized in this field. You can't just rely on the community who just tweet bullish EF things. That's not the same thing. So proper marketing efforts can be done here. But I do think that pre-ETF, the main concern was those regulatory legal concerns. But in this world that we're in now, those concerns shouldn't exist anymore, I believe. And the EF should be more aggressive

because there's really no other entity that would do it. Consensus used to do it, but I don't know what's happening with them these days. They're kind of quiet. Whereas the Ethereum Foundation is still there. They've got the money. They've got the reputation as well of being a very well-run organization. Contrary to what you hear on crypto-twitur, they're an extremely well-run organization in terms of what they've been able to do over the years and what they've had to deal with

as well as a foundation there. So yeah, long story short, I think Ethereum should have much better marketing and public relations and communications. but you have to coalesce around where that is actually going to come from, where the findings are going to come from, and who's actually going to do it. But in the short term, give the Ethereum Twitter account to a group of long-term Ethereum community members

that are very, I guess, like, trusted and aligned within the Ethereum mission. Let them go crazy with it, because that will be a big win already. Because you already see how much attention Vitalik's tweets get, for example. Like me, you and like David Ryan and me, we can all tweet as much as we want, but we're viewed completely differently to someone like Vatelik's. italic, right? For example, we're viewed completely differently in terms of our reach as well. Like, our reach is very small compared to that. So if we have the Ethereum Twitter account

tweeting out these things and educating more, it has like a thousand times more reach than we do. And we can reach more people. We can get better kind of handle on marketing and PR. So I think that's what needs to be done there. So that, I would actually say that's the biggest issue we have in the Ethereum ecosystem today. Like by far is the communications marketing. Everything else, I think, is quite all right. I think we're doing really well on that stuff. But yeah, marketing, we've always been bad at marketing, I think. Yeah, I think I pretty much agree with that take, particularly on, like, something that and I haven't said in a while, but used to say all the time is the most bullish thing for

Ethereum is to be understood. And I think that the Ethereum marketing is like really kind of lacking. And so we're not educating enough people. The one area I would actually like say, though, is Ethereum, the network needs less marketing. It still needs some marketing. and ether the asset needs like much more marketing much more focus like Ethereum the network has already kind of reached escape velocity and taking off whereas ether the asset how to value this thing whether eth is a monetary asset or is just gas and I mean you even look at like black

rock and tradfi and the way they pitch bitcoin versus ether they they pitch ether as kind of like a crypto technology growth internet like tech platform whereas bitcoin they they um pitches an asset. And that's just flat out wrong, right? Both assets are long-term, store value, monetary asset, collateral assets, and they're kind of like pitching wrong. Anyway, I think from their perspective, just on that note, like when it comes to the ETS, I think they just don't want to cannibalize their products, right? I know. Which is just like a natural consequence of having these two products. Being second. Yeah, well, yeah, exactly. And being the underdog, it's like if they were to pitch BTC and gold to investors in the same presentation, right? Like,

they would probably pitch Bitcoin as a technology platform because then they're kind of rising gold in the store of value. Yeah, well, they kind of do. Yeah, well, yeah, exactly. So I think from that perspective, it's kind of hard for them. But I think that they're still going to be the biggest marketers of ether as an asset for sure and getting value to ether as an asset. But also, I don't know if people may be aware of this.

I've tweeted about this and talked about this on my show. I've talked to some of these ETF issuers, and they've said to me that most people they talk to haven't even heard of Ethereum. Like, I haven't even heard of Ethereum, which is crazy. is wild considering how big Ethereum is, but I guess that's within our bubble. Like outside of our bubble, you know, obviously everyone's heard of Bitcoin because it's always in the news, right? But Ethereum, yeah, they haven't. But then when they actually learn about it, they, as probably a technology platform first, they probably don't pitch the Aether's money thing to

them first, but that when they learn about it as a tech platform, they start to really understand it and see the value in it quite quickly. So again, to your point, Ryan, yes, the most bullish thing for Ethereum is to be understood. And that flows on to Ether as an asset as well. But I do think that if we can shore up the marketing around Ethereum as a platform, as a network, as a technology, the ETH kind of asset stuff will be downstream of that, because I don't think we should be going for ETH as an asset first, because Ethereum really is a technology platform, first and foremost. ETH as an asset is, you know, linked to that and is definitely valued based on that, but also it's used as a store of value, and that kind of like reiterates its value

through the technology. But yeah, I think that we need to show up our marketing there, and it needs to be a lot better than what it is today. And obviously, it's not just us saying it. A lot of people in the community are saying it. So the way I look at things is that if the haters are saying it, if the people who love Ethereum are saying it, if the neutral parties are saying it, then you can be pretty sure that it is the right take, right?

If everyone's saying it from the different camps, you can be pretty sure that that is the truth. Like maybe not the whole truth, but that is like closest to the truth. Yeah, well, I think in this case, even Heath haters are maybe even saying this. So, Anthony, this has been great. Thank you so much for spending time.

Give us the bull case here. Let's end with this in kind of the what's next category. So ether the asset has had, let's just call it, a lackluster cycle, this cycle. And it's like not clear that, I mean, David has taken to kind of debating whether we were ever in a bull cycle at all. And maybe we're kind of in a bare cycle. But like, so maybe we're in this neutral limbo type territory. maybe we're still in a bare market, I don't know, but it's not quite a full-on bull market.

But other communities are way up from their bottoms. I mean, Bitcoin holders are feeling pretty good. Slana holders are feeling pretty good. Even in the alt, like, you know, layer one ecosystem, some projects are, like, doing quite well. Ether, not so much. It's had a lackluster cycle so far. And now the cycle's not done. I don't know if we're halfway through.

I think a lot of us are expecting 2025 to be a big year for. crypto in general. But let me ask you, do we get a strong ether this cycle? I mean, were you going to hit 10K plus? Like, what are your kind of your price predictions? Because some people at this point are saying that this entire cycle will skip ether the asset. And I'm pretty sure that's not your perspective. Yeah, I mean, it's definitely not my perspective. And there are multiple ways to attack this point, I think. I think in terms of price predictions, I think we shouldn't be doing that anymore, like overall, like with any asset. Not just, not just Eath, by the way, with BTC, because I think, you know, there's all this talk about BTC going to

300, 400, 500, 500, K this cycle. I actually don't think that's going to be the case at all, just based on the fact that stop looking at price and look at market cap. BTC is $1.3 trillion asset. It is in the top 10 assets in the world, right, out of everything. Like, for it to go that high, 300, 400, 500, 500K, this cycle, mind you, I'm not talking about like 10 years. I'm talking about this cycle. The amount of money that would have to come in to push it that high is, is maxed. massive, right? So I think that any asset you're looking at right now, especially the bigger ones, yeah, doing price predictions is kind of a fool's errand at this point. And I understand how people do it is because it's like, well, you don't want to be saying BTC is only going to 100K.

You want to say it's gone to 500K, so you can get phomo and get people in, get able buying this thing. So I understand it from that perspective. But yeah, if you just look at the market caps, like, they're massive. And on the market cap note as well, if you look at, obviously, Solanhas are performed quite well against E&A. this cycle, right? But then I take a broader view here and I look at what happened, I guess, like in the bear market. If, and I people maybe over index on the short term here, it's like, I think Salina went down like 96% in the bear market, so like 260 to like $7 or something like that. And if you do the math on Eath from $4,900, 96% down is around $190, I think. I did this

math recently. It didn't go to $190.0.8. So more than four times as a bottom here, like we're talking about like the cycle stuff. So, so what was going in, and if you look at the market cap, I think Seoul bottomed like a $5 billion market cap. For ETH, it was like a $100 billion market count. So, so if you're looking at this as a USD market cap valuation kind of framework, then you can see from that framework why these other small assets just can go way, way beyond than ETH can. Now, do I think that trend's going to continue from here with Seoul at $100 billion, ETH at, oh, I think it's like $80 billion, something, ETH at $300-something billion, Bitcoin at $1.3 trillion.

I think once you get into that kind of market cap territory of hundreds of billions, it's a lot harder to move that asset, a lot harder, because you need a lot more money to move that asset. So I think that if you just take a snapshot of the last 18 months, it's not giving you the whole picture on things. And I think the reason people overindex on this is that if it was just ETH bleeding against BTC, in terms of like not outperforming BTC, everyone would be chalking this up to, that's just normal cycle things because it really is. Historically, it's the normal cycle of BTC dominance going up

in a bear market because everyone flees to safety, especially when rates are high. It's like, well, why would you buy the risky kind of like stuff over here where we can just buy, like if we're in crypto, we just buy the safest asset, which is obviously BTC right now. And then, of course, if, if Sol wasn't outperforming it, if some other things kind of weren't going crazy, like meme coins and stuff, everyone would be like, okay, this is just a normal cycle here. So I think that when you look at it from, yeah, that market cap perspective, that performance perspective from like bottom to where it is now and into the future, I do think that ETH is going to surprise people, not just from the crypto-native people maybe being under-allocated to it, but also from the

ETFs. I know the ETF has been a slow start for ETH. I do think that's a big consequence of it launching so close to the BTC ETF. And then the issue is not wanting to cannibalize the BTC ETF as well, but also the price performance too. Like if you're looking to allocate to an ETF and you look at BTC's year-to-day performance, you look at ETS, BTC looks a lot better, right? But it works, works the other way where it's like, okay, well, if Eid starts going up for whatever reason, like there's a million different reasons that can happen, then I think that people are going to, you know, promo in, so to speak, to the ETFs here. So long story short, I have a very bullish outlook on ETH, of course, but it's more

longer term, especially because the market cap is bar. And I'm sure next cycle in crypto, we're going to have another asset that does really well against ETH and BTC, right? Because it starts from like a $5 billion market cap instead of $100 billion, for example. And I'm sure, which is funny to me to think about, but I'm sure next cycle, the people are going to be making fun of the Solana people like they make fun of the Ethereum people now because it's going to be the same kind of talking points of like, no, we, you know, we have this asset. It is money, right? It is a story of value.

It's going to do this, going to do that. So I think that we're just going to keep repeating that kind of narrative cycle over and over again. And it all comes down to the size of the asset. And I think people miss that because they look at price. No one looks at the market caps. And if you actually look at the market cap, I think Solana's market cap is at all-time high where its price is not because of the fact that the inflation has been high.

Bitcoin's market cap and price are at all-time high today, but look at inflation-adjusted price as well. Then no one looks at that either either. Bitcoin's inflation adjust that all-time high is higher than what it is at 73K or whatever it is. Same for all the other assets. But I think people over-indexing on price is where the confusion stems from and where they may not be able to zoom out.

see the bigger picture here. Bottom line, Anthony, you think ETH is going to, like, not be skipped this cycle. It's going to have a blessed cycle, at least, like, because so far, I mean, the last time ETH hit, or, sort of Bitcoin hit 70K, those earlier this year, and ETH was closer to 4,000. It was like 3,800 or something like this. And this time, it's at, like, 2,500. And people are saying, like, what? Like, what's happening here?

And they're worried that the cycle's just going to skip, like, leapfrog right over ETH. I don't think skips the right term. I will say that I, of course, I expected ETH to perform better against BTC during the kind of cycle because of the better stuff like the merge, reducing issuance by 90%, the burn, stuff like that. But I think I've learned that maybe the hard way that liquidity cycles matter a lot more for these assets than individual kind of, I guess, like tech improvements and issuance stuff. Because if you actually plot the ETHBTC chart against the rates, like the US rate chart, it's not like a one-to-one mapping, but like it seems to follow. And that's like a liquidity chart where

essentially when liquidity is getting out of the markets and going into like treasuries, people who are still in the markets don't necessarily want to bet on like super risky stuff. So they go into the safest asset. But if you actually look at crypto more broadly, the only assets that are performed like extremely well over like maybe the last year is BTC, sole of course, and then meme coins. Now, meme coins have a market cap of basically nothing. Like that's, why they perform well. You can't even compare those things to those three, you know, to BTC and Seoul, even, and even ETH, of course. But if you actually look at the broader market, yeah, people aren't bidding on the defy tokens that are actually doing well, the L2 tokens, stuff like that.

Like, they've all bled completely. They're all down, not only against ETH, but against USD, or at least most of them are. So I think the, as much as people maybe don't want to admit this, liquidity cycles, rate cycles, you know, the Fed cycle plays a huge part in all of this. And if that's true, you could expect ETH to outperform from here now that the rate cycle is flipped. And we're going with cuts now instead of rises and monetary policy is easing. So if that is true and that holds true that that thesis, then yeah, Heath should outperform BTC from here. I know Ben Cohen, who you've had on, he's very big on this, right?

And, you know, I'm not the only one saying this. He's been saying it for quite a while now. But just looking at the data and seeing what the picture that kind of paints, that's how I view it. Yeah. Not to say that fundamentals don't matter. they absolutely do. If they didn't matter, then ETH wouldn't be worth $300 billion and Sol wouldn't have gone up from all the economic activity that it's been able to generate and all the growth that it's had. But if you're looking longer term out and you're looking at these assets

versus each other, not the USD market cap, I think it comes more down to liquidity cycles than anything else. I think at this point in the market, you got a lot of bulls cheering ether on and certainly like a lot of core believers that are still holding ether, right? It's like I don't know who sells at this point. we probably have a pretty diamond hand gang. And the thing is that, like, at the market cap size that ETH is, it's all about, okay, where does the next marginal dollar come from to move the price? Like, a regular retail user buying a few thousand dollars worth of ETH is doing nothing to the

price of ETH. Even like a lot of those investors, probably not moving ETH that much because it's such a big asset. Same with BTC, mind you. And maybe even Sol is getting to that now because it has such a large market cap now. So then BTC has been able to get that marginal buyer via the ETS who are buying lots of BTC, obviously, and that's, that's people that, that's regular people as well, but there's also massive kind of funds and Wall Street and stuff like that. So until ETH has that, which I think

it will in the future, but I think a lot of people are basically making the, the kind of bet. It's like, okay, well, until Eith has that, he's going to struggle to kind of move up because it needs that marginal big money buyer to move its price. But if you don't believe that's coming, then, yeah, you can be bearish Eith. Like, if you don't believe that's coming. I do believe it's coming. I really do. And I think people are underestimating it. But, Again, I don't know for sure. I'm speculating. I'm not going to tell you it's 100% certainty.

But yeah, I think at this point in time, yeah, we definitely need like at that market cap, we need that bigger money marginal buyer to decisively move, move ether. But I think as part of the regular market cycles as well, with a flight of new kind of money coming in from like retail investors, that can still move ether up. But if you want ether like 10, 15, 20K, it needs to be the big money as well, like the Wall Street, ETF money. It can't just be that regular retail buyer. because I would say that without the ETFs, BTC would probably be worth like 30, 40K, maybe not even that

because of the fact that like there's just, it's just so large the market cap. There is not enough liquidity, especially during the tightening cycle, there was not enough liquidity buying BTC because it was all in treasuries. Like it's like, why would I buy BTC when I can just be in treasuries and earn this massive yield, relatively massive yield? So yeah, I think from that perspective, yeah, I'm bullish going forward on on Eath getting that money. Well, there you go, Bankless Nation. Anthony Sassano is still bullish, Eith. Anthony, thank you so much for joining us today. Thank you for having me. I hope people learn something new. It's always my goal when I come on here. I know I've been on a few times, and maybe I'm considered a bit of a boomer these days because

I've been around for so long. We're all considering. Actually, there's an account on Twitter. His name's Bred. He puts out really great analysis about Al-2s. Yeah, and he recently said that he's coming around to the fact that Eith needs to be money. And I did the, I quote-tweeted this tweet with a meme, that meme of that like a good looking guy in the office. Oh, the human resources line. To the girl, ETH is money. And then me saying it like, he's money and the girl being like, hello, HR. So it's kind of that thing of like, Ethereum ecosystem, obviously wants new blood coming in and

then repeating the same measures that we've been repeating will hit differently. So, yeah, as I said, like even if people consider me an ETH is money boomer, I don't really care. As long as new people are kind of believing it and, you know, getting that message out there, that's the main thing. Agreed. Sometimes it's just a source. And, you know, some people won't believe it until Larry thinks as ether is money.

But exactly. Eventually. And then bankers will be like, guys, this is what we've been trying to tell you. Yeah. Human resources? Well, yeah, it's you guys. But Larry, like, he's an actual boom. I mean, he's an actual boom.

Larry, he said it. He's black grogly, come on. Yeah. Well, here you go. None of this has been financial advice. Of course, you guys know crypto is risky. You could lose what you put in, but we're headed west. This is the frontier.

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