The Wolf Of All Streets - The New Era For Ethereum | Experts Discuss What Will Change Post Merge!

Episode Date: September 15, 2022

Ethereum merge has happened and ETH switched to proof-of-stake. What does it mean and what are the implications of this? I discuss it with my guests: Anthony Di Iorio, co-founder of Ethereum, Nimrod Lehavi, co-founder of Simplex, Peter Saddington, VC investor, Pierce Crosby, general manager at TradingView, Jason Lau, COO at OKCoin, Gabor Gurbacs, Strategy Advisor at VanEck, and Matthew Sigel, head of research at VanEck.  Anthony Di Iorio: https://twitter.com/diiorioanthony Nimrod Lehavi https://twitter.com/nimrodlehavi Pierce Crosby https://twitter.com/crosbyventures Jason Lau, OKCoin https://twitter.com/jasonklau Gabor Gurbacs https://twitter.com/gaborgurbacs Matthew Sigel https://twitter.com/matthew_sigel ►► Get 20% off on your ticket to W3BX. Use my code: WOLF20. Register here: http://web3expo.live/  ►► JOIN THE FREE WOLF DEN NEWSLETTER https://www.getrevue.co/profile/TheWolfDen  GET UP TO A $8,000 BONUS IN USDT AND TRADE ALL SPOT PAIRS ON BITGET FOR ZERO FEES! ►► https://thewolfofallstreets.info/bitget    TRADE ON THE WORLD’S BEST DEX, BULLISH: ►► https://thewolfofallstreets.info/bullish/youtube  Follow Scott Melker: Twitter: https://twitter.com/scottmelker  Facebook: https://www.facebook.com/wolfofallstreets   Web: https://www.thewolfofallstreets.io  Spotify: https://spoti.fi/30N5FDe  Apple podcast: https://apple.co/3FASB2c  #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor.  Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

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Thank you for listening and enjoy. After years of waiting and delays, the merge is finally here and seemingly has gone off without a hitch. Some would argue that this is the biggest technical event that's ever happened in the history of crypto. So the very fact that it didn't utterly fail is cause for celebration. And today, I'm not even going to list all the guests because today we went really big. We have a ton of people here. Now, if you looked at the thumbnail, you would probably think that I've compiled a boy band, Backstreet's Back, all right, because we've got like seven or eight of us.

And the flyer really looks like we're going to get ready to sing, but we are not going to sing, but we are going to talk about the Ethereum merge, what that means for the future. And honestly, I have no idea what we'll end up talking about after that with this many people, but probably exciting to keep me on my toes. You guys don't want to miss this. Let's go. What is up, everybody? I'm Scott Melker, also known as the Wolf of All Streets. Before we get started, please subscribe to the channel and go ahead and gently caress the like button. You guys can actually do whatever you want to the like button. There's no judgment here. This is a judgment-free zone, so just do the like thing.

Anyways, guys, as I mentioned, there's a lot of suspense coming into the merge, and much like I expected, it was kind of like Y2K, right? You went to bed, and the merge was going to happen, and you woke up and apparently the merge had happened, and you don't feel any different, right? I don't particularly feel merged at the moment, but I guess no news at the moment is pretty good news. So we're going to have rolling guests, as I said today. I'm going to bring on everybody that we have here already. I've got Anthony D'Orio, Gabor Gerbach, Matthew Siegel, and Jason Lau.u wow that format is looking weird let's try that cool how are you guys all doing you don't have to respond i know

everybody is doing well i was commenting vanette clearly has a vest only policy in the office if you can see from matthew and gabor they're both uh dressed in vests ready for the board boy band but anthony i actually want to start with you. You're obviously one of the co-founders of Ethereum. So this is a huge moment, I would imagine. When you guys started, it was obviously proof of work. At what point did the conversation switch to a potential move to proof of stake? And what was that process like? And how did we end up landing here in 2022? So it was pretty much right at the beginning. I mean, it was always known that there was going to be that move to proof of stake down the road when it was ready. And that was done to ensure

that proof of work miners knew that what was going to be coming up down the road, who knows when it was going to happen. And it's taken a lot longer than was expected, which tends to happen. But it was really right from the beginning and the difficulty bomb, which was an explosion that was put into the code at a certain time, it would go off to make proof of work mining not possible, was always planned and it's been delayed year after year, that bomb. But pretty much from day one, it was in the mix that that would eventually turn over and to get proof of work miners aware that that's what was coming. That makes sense. And so I think that every

platform exchange, everybody has sort of had a different plan for how they were going to manage this. Jason, specifically at OKCoin, how have you guys been preparing? Well, how did you prepare, I should say, and how's that going? I think over here, we're just glad that it went so smoothly. We had teams up all night, obviously. We had all these plans in case things didn't work out. And yeah, frankly, we're just all taking a collective breath and excited that this milestone actually happened. Like Anthony said, it's been years in the making, right? We've seen this come down the pipe and we're just glad it happened. And then obviously we have Gabor and Matthew here from VanEck. I'm sure you guys have been tracking this very, very closely. Either of you, I mean, give your thoughts on to what's happening now. And then I guess after that, we're going to switch into, you know, what we think this means for the future. Yeah, I'll go.

You know, I think we're pretty encouraged that there's been more ETH staked in the last six hours than there was in the prior, like four times more in the last six hours than the previous 24 hours. So if you look at it on a chart right when the merge happened, like staking activity went parabolic. So that's an important thing that has to continue, right, because the percentage of ETH staked is so low relative to other l1s and so it's that commitment to locking the liquidity up that's gonna hopefully diminish a lot of the cell pressure and make number go up so yeah i think we're encouraged by the fundamentals um you know the price action you can see around other major developments in crypto like bitcoin halvings and stuff it doesn't necessarily move the price right away it's about building commitment proving stability of the network, and then getting bigger players to commit by building apps, settling value on chain. And

hopefully that's going to come through over the next few months. Yes. You guys obviously are talking to institutional investors all the time. Is the feeling that people were sort of waiting to see it successfully happen and that's why we're seeing you know four times the amount of ethereum staked and people sort of flooding in now that there's a bit of confidence that you know the world's not going to explode yeah i mean i remember talking to institutions from 2015 about ethereum's proof of stake conversion so So people are definitely ready for this. And we'll see what happens. We'll see a lot of hash powers parked in ETC.

And we'll see where the miners end up. And definitely exciting. A lot of people are focusing on, just from a fundamentals perspective, for fees decreasing on the network, which is good for participants. So you can actually use the chain at scale. And there are some questions on the institutional side of what it means to change the security of the network for improved work. I spent the last, I don't know, nine, ten years talking about proof of work and how that makes it different from other systems that are more centralized, not necessarily censorship resistant and needs energy to defend

such systems. So this is going to be different than with proof of stake. But so we'll see. Some of the institutional investors are excited about this because of climate impact, which has been a big part of the conversation in the past few years. I'm not too enthusiastic about the climate conversation. I don't think anyone's enthusiastic about the nature of the climate conversation. And we can have a debate another time about whether it's valid or not, obviously. But I think to your point, a lot of institutions, whether it is valid or not, that's something that they have to speak to, at least to their investors. And it makes a lot of sense now that they can just sort of put that aside. Anthony, I want to go back to why was the move to proof of stake basically baked into the original launch of Ethereum in the first place?

I mean, it's pretty interesting. I mean, it's proof of work for seven or eight years, right? I know, obviously, it just wasn't ready. But was there a glaring issue with proof of work that you guys saw from the very beginning that made you want to move to proof of stake when it was available? Yeah, I think back then, there was awareness of deficiencies in proof of work. And there's deficiencies in proof of stake. There's deficiencies in pretty much anything. There's not going pretty much anything there's not going to be 100 that's going to be able to solve everything so um the idea that there was some foreseeing of a built up issues with with proof of work centralization uh potentials um the reason that things were all done through through gpus and

not a6 was the ability to get these graphics cards in the hands of people. So there's a lot of thought on how do we balance all the things that are needed to create a decentralized system, which I think Ethereum has always been first and foremost is about decentralization. That's something that I really respect from that project and gives me a lot of confidence that the first thing that is always going to come forward is decentralization. And I think other projects

that have tried to do things by twisting the dials a bit and reducing some of the decentralization to get benefits elsewhere, over the years I've learned to really respect the Ethereum process. And I left the project in 2015, so I'm not involved in Ethereum. But there was times, 2015 and 2018, where I was thinking that there were going to be some other projects coming along that were really going to eat its dinner. And I've swayed back over the last couple of years, and really that realization of that focus on decentralization and doing everything possible to ensure that is something that's led me back into the Ethereum camp much more and confidence much more in the project as a whole. So all the little things, including what is best for the consensus mechanism, what is best for mining that can decentralize as much as possible and get it away from the hands of collective

larger entities. Now, proof of stake has those downsides as well. I mean, we've seen what happened with Lido, an entity that emerged in order to ensure that the exchanges don't become the powerhouses of everything to do with staking. And now Lido itself is a major player and votes of DAOs to change it didn't work out. So I'm concerned mostly with DAO structures in the future is one of the biggest risks I think in the space and and the powers of larger entities that are going to be putting potentially profit motives ahead of uh of the ethos and decentralization motives that's where i think there's concern so yes back in the day there was definitely awareness of what would be a system that would be the future and could limit some of the potential issues.

There was a lot of talk of energy conservation, and that was a factor as well back then in the thinking along the way. But it was it was a bunch of things where there was foresight with a team that has seen the future of where things are heading, and that's really what we did very good at seeing where the future was going. The people involved were Bitcoin people that saw where that was heading. We then started Ethereum based on deficiencies we saw with Bitcoin in doing further advanced things. And all the formulas come together to build what Ethereum is today. And a lot of it was

considerations such as that move to proof of stake right from the beginning. That's where it's heading and giving people the warning that that's where the future would be. Gabor, you mentioned before that people are looking forward to a reduction in fees. But to my understanding, that's not really in the cards, at least at the moment. Right. I mean, I think there's been a lot. I didn't say that myself. No, no. I said, yeah, Gabor said the institutional investors. I'm not putting the words in his mouth.

Yeah, eventually. But I think that like one of the things that there's been a lot of, I think, just confusion about what the merge really means, right? A lot of people think it's going to become faster and cheaper. Not really going to happen right now, correct? Anyone can jump in. Jason, I see you nodding your head. You're completely correct. There's no difference.

You can wake up. You wake up today. You may not even have known the merge happened. It didn't matter for an end user or developer or something like that. It's a step-by-step process. It's a key part that's going to lead to those eventual wins down the road. There were a lot of things that needed to get done to prepare for it. I run a number of nodes. We had to make sure that we did things properly in order to do that for our clients and our customers. But yeah, most people aren't going to see anything. They're going to just see that they still have their Ether and they're going to hopefully

hold on to and wait to see what comes out of this before making any decisions like exporting their private keys in order to get the proof of work coins. So kind of wait and see what's going to happen over the next few days is what I think most people are doing. But yeah, a lot of people aren't going to see any changes. Got it. Here's a question that's going to be a trap and none of you are going to probably want to answer. Why are Bitcoiners so angry about the merge? Anyone?

I can answer that. I'm sorry. Go ahead. I'm curious about you. I think first of all, generalizations like that don't really help to really set the stage. There's not this all bitcoins thing. I'm a big bit. I said it was a trap. Yeah, that's okay.

I hear you. And I'm just going to caveat with a little bit of, there's a lot of people that just are transfixed on Bitcoin and that's fine. They see it as a superior system and they could be very well right. But you're just going to get this division of people that have money at stake

and they're going to want to be pushing what it is that they have a vested interest in like anything else. So that's why I think there's a potential fear that this may be something successful that's going to impact them. And it's a good testing ground to see how proof of stake does turn out. So I hope people are doing it with an open mind of could this be better as a whole? And then maybe it starts shifts that there's ways of doing things that are different that maybe Bitcoin will pick up on you know Scott I think that they're I think you're basically right right they're angry because they're jealous because the price has been underperforming uh and um you know in my view Bitcoin has to work for the whole space to work like betting on a on a de-correlation with ETH mooning and Bitcoin going down is like a

low very very low probability event so you know some of this capital that kind of went into ETH anticipating the merge you could see it in the overheated futures and options market that's starting to unwind some of it may flow back into Bitcoin which has been the laggard and then everyone can be happy I mean well I'm sorry to jump in. ETH BTC is up, what, like 75% since, you know, just a few months ago, right? That's a big swing. And Bitcoin's been sort of mired in this rut of whatever the 20K area. I don't think anyone's very happy about at least the Bitcoin price performance.

And, you know. No one is happy about the interactive markets i think it's like the whole market is hit by macro and obviously it had some momentum with the uh transition and uh again i think the reason what i see uh bitcoiners and myself included uh you know being angry sort of with the process and not really so first of all you know there's a group of people who are just constantly angry. You can't do anything with them. I guess the people who are in the space

for a while are not really angry in the same way. They follow the process. And one of the big questions around a lot of people don't believe that proof of stake will lead to more decentralization because power will be at the hands of people who have assets and and you know in a some seniorage way meaning that people who already have a lot of heat they'll be able to get more eat and you know you're not able to compete for that you need to just buy the asset and so so there's a decentralization question that a lot of Bitcoiners are not settled on. And the second is just the whole ethos of sort of like decentralized censorship

resistance is linking to energy. It's a physical process that's really hard to beat. And it's designed to be government and proof of stake, in my opinion. And I believe a lot of Bitcoiners think the same way. It's not resistant the same way to sort of like government pressure. And that may open up a new can of worms for the space. So it is a new attack vector for the whole space in that respect. You know, a lot of the anger, I think, is like dumb, in my opinion, because it's a really cool technical feat and there is room for multiple proof mechanisms and multiple systems.

And I think Bitcoin and ETH are fundamentally different, too. Like one of them is sort of like a smart contract platform. Bitcoin, in my opinion, while it is a smart contract platform, it's more sort of trying to be money and this digital gold store value type of instrument. ETH is trying to be that a little bit, too, but more application layer, like sort of like an app store for other applications to build on. So I think they are different in promise. So, you know, I don't get a lot of the anger.

I would think that actually as a Bitcoin, you would be excited that there was a further differentiation. Yeah, I mean. And I think it was Matthew really quick that said it. I mean, or maybe it was Jason that talked about the price performance of Ethereum versus Bitcoin, certainly, and how Bitcoin has been mired. I mean, you go back to the Bitcoin halving and Ethereum has 4x outperformed Bitcoin since Bitcoin's most fundamental bullish event. So I could see why that would trigger some people. Go ahead, Jason. There's also one thing about Bitcoiners.

I'm a Bitcoiner myself, too. But, you know, there's this view that developers on Ethereum and all the other stuff, they're reckless, right? They don't know what they're doing. They're making changes too quickly. But I think this actually shows that, you know, with their, they can do something technically quite amazing, right? There's a lot of testing. There's a lot of thought process in this process and it worked out well, right? And I think maybe that's something for people to get angry about. But like I said, I think it's, I think it's pretty silly. It took eight years, right, Anthony? I mean, this is to say that took eight years, right, Anthony?

I mean, to say that it was reckless, the amount of testing, the amount of, I would say, responsible delays to make sure that it was done right would indicate that that's an unfounded criticism. Yeah, I would think so. But could there still be issues that emerged? Definitely. Sure. I don't know what the right time is, but I think that they've always made sure that they try to be ready as much as possible and delay things with good cause. Yeah. Jason, I see you.

I got to run. Thank you, gents. Thank you, guys. Jason. And we actually have another one of your guys' favorites. Nimrod and I always have the funniest conversations I'm having. I'm going to bring on Nimrod in the hobby as well. And he's dancing currently in low res

how are you man nice to have you oh good hey guys hey nimrod what's up so so anthony i want to touch on something you talked about a little bit earlier which was uh all of the fact obviously that it's graphics cards and the differentiation between the mining well what the hell happens now to all the ethereum miners and all of those graphics cards? I guess people can look for other chains that they can shift over to. They can sell their cards. They could have already been thinking about this for months and years. They took what to do with it before and figured out a plan for themselves.

Or they're going to start moving over to the proof of work chain and see how that goes and see if that that's going to get some traction there so i'm not a miner never have been but i'm guessing that's the options that they've got anyone else have thoughts on the future of mining here i mean it seems like we're already seeing a massive uh rush of and price drop in these both new and used yeah so they like there is i think 200 terahash or so parked already in etc and there's some other chains that are picking up some of the hash power so that's going to be interesting for the security of other chains with respect to the equipment i think uh it kind of screws up the whole 18-month minor cycle and i haven't been mining for a while but that's going to be impacted and there's going to be a lot of you're calling short Nvidia

not financial advice ever here guys yeah exactly but yeah so I think the to me the interesting thing is where the hash bar is going to go and to your end from this point uh you know people might try uh the proof of work chain i'm curious actually what group that chain is going to attract and how they're going to work with the ethereum classic chain and how that's going to play out uh should be interesting uh in a few days we'll know right so then rod you definitely have thoughts on shorting NVIDIA financial advice. I'm not sure if it's worth sharing, but in the past hour or so, I was thinking about it more as a large-scale social experiment. Do people actually care about environmental impact because if there's no like if there's no massive price action with with the proof of stake if now it means nobody really gives a fuck about sorry nobody gives a

hack you can say it it's okay you can say fuck yeah nobody gives a fuck about the you know the whole narrative of bitcoin is wasting energy uh it has a bad carbon footprint blah blah blah if there's no like massive action now when eth is proof of the state i think nobody gives a and we can just drop that narrative and never hear about it again what do you guys think we're five minutes away from uh when the eth pow folks are supposed to release this code and the price of eth pow i have to say it's holding up better than I thought the consensus thought, right? Like it hasn't crashed. There's still a lot of hash power, like 700 on the ETH POW chain. So like so far, it seems like this is going to be a fair bit of

stranded capital. I haven't looked. What is it currently trading at um so on on gate it's like in the 30s that's high right i think that futures were implying that it would be about 18 bucks all right 44.67 now on gate 44.67 peaked i mean beyond the uh beyond the i guess selfishness of miners who don't want to let go why do we need this we don't but we don't need dtc as well traders will trade it was proven really well in the previous fork traders bitcoin cash as well right i mean yeah and between diamond and bitcoin gold and whatever other now whether whether or not there's enough rewards to incentivize uh folks to run all this electricity is another story, right? Because haven't the ETH POW folks allocated themselves all the base fees and all the ETH that the foundation owned as well? So there's a lot of economic power in But does that mean that there's going to be a use case or development or any purpose for it moving forward? Or is that something they're going to try to back into depending on whether it's worth it based on price?

Yeah, the latter, I think. So they'll build something if it exists. That's the case, right? Like for a lot of other chains. We've already seen a few notable people with massive followings are going to try to take advantage of what's going on with this. And they're probably taking massive accumulations of the coin and going to be able to use their networks in order to get other people involved with it. But at the end of the day, I think it's going to just be something that will fizzle down the road.

And I think there's just going to be a lot of actors are going to try to take advantage of what's going on here. Yeah. Nimrod, so your contention is that if the price doesn't go up in the short term, that nobody cares about the carbon footprint. Is that correct? I think so. Because I mean, part of like, also what Vitalik just tweeted this morning, like it's 0.02% of, you know, the global footprint, it's, you know, it's pretty big for one ecosystem to snap your finger and remove that carbon footprint. And if there's no actual support from the crypto ecosystem, I think it's a valid claim that nobody cares about it.

So my guess is there is a lot of esg and institutional pressure and government pressure on companies they are knocking on doors and pushing companies to literally um you know move to other proof mechanisms just a week ago the white house put out a note through the epa and some agencies they are trying to uh you know blockchains to more environmentally responsible uh proof mechanism which is again i completely disagree with that it's not what america stands for and all that but that pressure is real and uh they are pressuring financial companies as well and uh a lot of the financial companies are sort of you know just play this game and and you know that that that's that's my opinion is that this is what it is you know i don't know if it's consciously or

not but that's one of the things that it is trying to get ahead of and and would probably benefit from uh at least like lessons the attack surface um on it um so i again um in my opinion uh there is you know energy consumption for proof of work systems that are established like Bitcoin is a feature, not a bug, and it's worth it. But, you know, it's just one person saying it. But then there's real government pressure and mounting pressure from the EU, from the US to push and prove work systems, energy, like the whole macro situation with energy not being abundantly available, is also going to play in the next six months, we'll see this

conversation over and over again. I'm actually curious how the aid foundation consensus and some of the larger players will manage this discussion, because I feel like there's a, you know, a good way to handle this. Like, you know, like, I don't know if they're going to lean into it and say, you know, we're environment conscious and that's our advantage and play that whole game or say that, you know, this proof mechanism is just better for us, works for our system and, and you know, stand up for sort of freedom to do whatever you want.

I'm actually curious how it's gonna go. I think it's a fair comparison if you say, gold is not environmentally friendly as well. You need to dig it out, you pollute everything and it's still usable as a hedge asset, but Visa and MasterCard try to be. So maybe like the everything on top of if has a has a better status i'm also interested to see like what will happen in the next equivalent of

defy summer now that we can push like massive amounts of transactions without paying a on money for each transaction that could be i think very interesting like to see in the next bull cycle. Hey, Gabor, I know you might have to go. I don't know if it's your time, but I want to make that seamless and comfortable if you do. Thank you. Thanks, Scott. I appreciate it.

And I'm going to be nice and proof of work. Yeah. Well, I mean, talk about that. And as Gabor enters, we've got Pierce Crosby here from TradingView to add as well. But now we've got a lot of people on the screen. This is aggressive. And listen, there's been actually a lot of, to that end, Nimrod, and to what Gabor was saying, there's been a lot of chatter that's now, at least in the eyes of regulators and legislators, not obviously the eyes of the community, that now Bitcoin will die because it'll basically be regulated away if Ethereum is successful on proof of stake. I think everyone here probably agrees that's nonsense, but I can see the argument that maybe they would come after Bitcoin more heavily than they would have before based on the sort of ESG argument? I think it will be more difficult for them. I mean, if anything, you know, not picking a fight, Anthony, but, you know, Bitcoin is still more

decentralized. So, you know, if they want to shut it down, it will be much more difficult. But again, I think, you know, I think everybody here agrees that it will be practically impossible to regulate off Bitcoin just because if proof of. No, but they could make like higher tax rates on capital gains from, you know, proof of work generated profit. Or make it a lot less attractive for institutions right by just with with harsher regulation i don't think anyone believes bitcoin's going anywhere uh yeah i just

think that the the argument there is exactly what matthew is sort of alluding to that just make it a lot more difficult and make it uh more attractive to be in other assets but to nimrod's point like let's see if anyone actually cares that this is now more green. And I just think the bold case is that a very large multinational company or sovereign decides to settle a bunch of value on Ethereum. Even yesterday, there was news on the tape that Russia is going to be trading oil and a handful of cryptocurrencies that are yet unnamed. So will one of these multinationals or sovereigns like look at the new Ethereum proof of stake chain, do several months of due diligence and say like, OK, we're going to pick ETH? Like

the probability of that happening has to be higher than it was two days ago. But it's going to take some number of months to confirm like whether it happens or not and if over a really regulating bitcoin how would the regulator uh consider if you trade wrapped bitcoin on east yeah it's nonsense it's not gonna work yeah exactly but they can but they can make the big institutions which we can debate whether we want them here or not but it can make the big institutions just say we're not going to touch it, right? And so the volume goes elsewhere. I don't think that there's any argument that it's going to remain. I mean, Anthony, I would love to hear your response to what Nimrod said about decentralization. In terms of, sorry,

comparing Bitcoin. He said basically, you made the argument, obviously, the move to proof of stake was going to further decentralize Ethereum. No, I think that they each have their own challenges of decentralization. So I think that there's potential on one side that people are believing that either way, you're going to have these large power entities ability to take control. And you're going to see already it's kind of centralized in the hands of just a few entities that are controlling so much of the between Lido and between the top exchanges. So I don't necessarily believe that they're scot-free, that this is actually going to be something that's not going to lead to eventual centralization. And I think that coupled with DAO structures and DAO powers actually is very troublesome. More and more over the last number of months, I've started to really

think about more about how DAOs could potentially be a major problem. When you get people that are joining power to create massive entities that are then incentivized by the monetary gains rather than the ethos of decentralization and other things, which was shown in the votes with Lido to not reduce their size and instead keep growing it. I think it's a big problem. So I don't necessarily agree that this is going to lead to the decentralization that might be thought and that there could be things over time that weren't thought about or other things that emerge

that are going to enable people with the power to, to take control of things. So. I mean, isn't, isn't the D in Dow decentralized, right? We're going to have to start calling them cows. Well, it's, it's, I, I thought this for years. I mean, cows are supposed to be decentralized autonomous organizations, but when you have to giving people the ability to vote that don't actually know what they're doing i like to say it's like telling a plumber to tell what an electrician should be doing and this is how democracy really

works and it's it's a flaw of the system whereby you're just going to get people that are going to vote i want more money and they're going to just they're going to be able to sway these votes and they don't understand the repercussions and consequences centralized so yeah that sounds very not doesn't sound no it's democratic but it's not a very good way of doing things because those people just don't know what they're doing and they have too much power to make decisions that they don't know any better like let them lose market share organically right just let them lose market share organically it's not anything to be concerned about right i think you just described the american market share troubling i don't i don't get it sorry say again matthew i'm saying that like it so let if you think those entities are less efficient because um uh uneducated people

are are voting or you know then just let them lose market share organically i don't think it's like any type of systemic concern or anything that requires a change in structure. It's like Lido got to where it is because it's a good product. It's not a majority of anything really. You know, if you don't like it, stake somewhere else. Okay. But let's take a look at what happened with the DAO initially, the very first DAO. And let's look at the power to be able to create change and create forks and do things based on something going wrong with too many people having too much control. The initial DAO was an experiment whereby people put a ton of money, a hundred something million dollars into this project that had a bad contract and failed and people wanted

their money back. And that one of the people wanting their money back basically created a battle between consensus and immutability and consensus won and people got their money back basically created a battle between consensus um between consensus and immutability and consensus won and people got their money back so this is the power that dows these large entities can have to actually create changes that were not thought about so i don't think you can just say that just let these things go i think they could be a potential issue down the road that could have massive repercussions with the power and strength that these entities could accumulate and having the ability to severely impact the system, just like we saw with the Dow and the split and then Ethereum Classic emerging and it could have massive repercussions. So yes, I'm not saying don't let them do their thing.

I'm saying I think that people aren't still seeing the potential of DAOs being a massive problem down the road with things. And I think that that could be something that people should be thinking more about. I think they're Lord of the Flies and that they're probably going to go massively wrong. But maybe I'm alone in that. But, yeah, I tend to agree with Anthony. That's definitely possible. Pierce, thank you for joining and sitting there quietly while we argue about DAOs. But I want to kind of go a bit back to the merge and generally what you're seeing on trading view with regard to Ethereum.

I think we have a lot of like anecdotal idea that there's been this increasing interest, certainly versus other assets. But you probably have the actual, I don't know, data and insight based on what you're seeing on the platform. Sure. I mean, across 32 million people around the world, I could probably tell you what asset has the most attention at any given time, probably. In terms of over the past couple of weeks, you know, Ethereum specifically doesn't have any kind of large uptick, I guess, in overall traffic interest. And I think broadly speaking is that, you know, a lot of that has to do with, you know, great, great kind of anticipation. But ultimately, in terms of the actual traffic of attention, I think that really comes from a successful merge, not a pre-merge. And, you know, I see it no different than, you know, Fed Minutes. I mean, nobody actually pays attention ahead of Fed Minutes until the Fed Minutes are out.

So, you know, in terms of actually seeing a significant shift in attention, you know, you really actually have to have a successful merge before you have that attention switching from people to, you know, whether they're buying NFTs or altcoins to actually say, OK, you know, this is actually something thatTs or altcoins to actually say, OK, you know, this is actually something that I can I can really dedicate time to. And that's because, you know, on average, most people are not super, you know, microsecond traders. You know, it'll take a few days for this to really start to, you know, be understood in the ecosystem. Is it? Wow. We actually do have success. We do have kind of a consensus. And therefore, you know, I can rotate

a lot of my attention back to this to this asset class versus, you know, right now we're all kind of like sitting on the edge of our seats, just excited for what's potential to come. But but in terms of, you know, that actual outcome, I still think that it very much is yet to see the investor class more more, you know, hyper focused on this. And I think that you'll much is yet to see the investor class more hyper-focused on this. And I think that you'll see that over the next couple of days. I do know the number of Ethereum merge events and parties that are scheduled over the next 48 hours is parabolic, to say the least. So there's definitely, within our crews and like within our kind of um i guess social circles there is a ton of attention but you know if we're thinking about

this from an actual uh play from an investment perspective you know it's really not mainstream enough for for to see any like statistically significant increase in attention outside of, you know, the micro circles of like the really hardcore crypto people. You know, and I think that you'll actually start to see cascading orders of effect into the more retail asset class over the next couple of days. If this is really the success we were expecting overall. for all. Right. As for I mean, for investors and traders, shouldn't we really see the impact of the merge over months and even years, you know, with the deflationary aspect and obviously the supply, you know, issuance reduction of up to 90 percent? Matthew. Oh, Matthew's out of here. Perfect. So, I mean, isn't that something that should take a long time to really play out? It's I mean, we keep joking. It's like Y2K, right?

You wait for the date to change, the date changes and you go on with your life. Yeah, I don't really think that I mean, like in terms of all the anticipation, it really will build up into in some ways, unless we see the actual impact on chain, you know, a bit of a bit of a nothing burger in the sense that, you know, Ethereum is now much more scalable, much more kind of usable for a bunch of different instances. But beyond that, I mean, I think it just looking at, you know, say Nasdaq from a charting perspective versus the major asset classes in crypto. And, you know, the correlation there is still so strong that you really, you know, I mean, my my hope in reality is that we do have that divergence. Right. But it literally is the exact same pattern. And at the end of the day, until we have a divergence there, I think you'll have a lot of the larger macroeconomic environment kind of being a bit of a burden, if you will. Even if Ethereum has this really large success, it's kind of, you know, we do need to start to see really kind of a decoupling from the NASDAQ and from the larger tech sector before you have that kind of, again, uncorrelated return and really like investor attention overall. So but I mean, that said, I'm very excited in general because moving this off proof of work in general, it's really interesting to think about what the implications are overall. In terms of DAOs, I'm actually very excited about the DAO implications as well,

just because the idea that these autonomous vehicles can actually fully control themselves and really build up war chests, if you will, is something i think of is really really compelling for for the space um i don't know i'm i'm quite uh quite a big fan i'm not actually an owner but a big fan of like the nouns projects in the in the nft landscape and they built up a war chest of you know close to 40 million um based on kind of the the sale of these unique assets which then you know is going to be actually deployed in very very interesting ways by by the dow itself you know percentage owners of this larger decentralized organization and so um if this you know in some ways makes it much easier for folks to get behind um the concept of of dows in general i think that um i think there's a lot of implications there in terms of, you know,

a more commonly structured vehicle for kind of the larger crypto ecosystem in general. Anyone thoughts on that? Yeah, I think that the network will not get congested because too many people are trading cats. That's That's an upside. We laugh, but I mean, that really... Yeah, that was a shitshow. Sorry, I was interrupting Anthony in a very Israeli manner. Sorry.

No, I think there's a lot of benefits to DAOs. I think it's going to take a lot of time to get them sorted out and figured out. For me, the concerns of what this is going to lead to is something that i've always thought we haven't we're not equipped to and i think charles told me this one time hoskinson when i asked him about this concern about what we're creating here and very clearly coming back with the yeah we're definitely not ready for what's what's being created here there's just you know the idea of war chests being developed with autonomous. And just think about the positives, but think about also potential risks and problems that are going to come out of these things. And whenever I hear something like that, I think of Skynet.

And I think of that's the thing people said about with Ethereum since the very beginning. Autonomous agents that are living there that can carry out based on without the inter engagement of humans to execute contracts and execute things that will execute as expected there's a lot of great things that are going to come out of it but there's a lot of very scary things that are going to come out of it as well so i just want to also make sure that that the thought and thinking towards how do we mitigate the problems that are also going to be emerging from these type of systems that are coming out should be not just how great the stuff will be but also how do we how do we the creators and the the technologists and people focus on problems that are going to

emerge as well and make sure that that's also in the back of our mind of the the consequences of some of these things that will come out so that's that's just a caution and not to ruin a party here but um i think there's amazing things the way we can bring DAOs to the table that are going to create amazing decision making and opportunities for people to delegate their votes and do things to create better systems. But there's going to be a lot of failure and there's going to be a lot of consequences over the next few years. And I think the initial DAO was just a sample of that. We saw what happened there and we saw how DAOs just disintegrated for a number of years after that one experiment. I'm not sure if people know this, but there was a lot of debate with the initial team about turning Ethereum into a DAO right off the bat. There

were parties that were clashing here of, let's be a DAO right off the bat. And then others thinking, wait a second, we're trying to develop smart contracts. And that would have been like telling Satoshi to do smart contracts on on Bitcoin right off the back. Let's let's do that. And thankfully, in my opinion, we didn't go in that direction because we didn't want to be we needed to make sure that we were focusing on what our mission was, the smart contract platform, not creating these new types of governance systems where everybody's their own leader and everything. It just, it would not have worked, I don't think, at that time. But there was a lot of people that wanted that to happen right off the bat. And I don't think it was ready for that.

And I'm still not sure that we're ready to see what DAOs are going to be bringing to the table. And I think there will be a lot of carnage that's going to be associated with it along the way and step backs that will have to happen when big, big problems do emerge. And I think that that dow was a very good signal of what it was back in 2015 2016 so just just a there's a lot of great things but also the cautionary tale of what are some of the consequences that people may not have thought about maybe it's just a symptom of the bear market but it feels like to me the shine has i mean

everything but has worn off the Dow concept in general. I don't even hear people talking about that. I mean, what if Dow's just kind of don't have the same with NFTs, the same with everything else? Let's get that hype cycle right. And then it's got to figure itself out with the value that actually comes forward over the years. And hopefully in a slow, steady process, it's not going to have too much too much problems associated with it. Pierce, you've had some amazing facial expressions in the last five minutes i know you have thoughts uh yeah i don't know i mean i in terms of just thinking about um you know maybe some of the pessimism around around dows in general i think

i think in terms of you know what the initial wave of d DAOs in terms of like my involvement with projects, maybe in 2018 or maybe even a little earlier, you know, I think there was this initial understanding that this was going to replace some kind of modern governance structure or something like that. I think in general, like that concept is maybe a bit kind of misguided. I think that, you know, what the internet is trying to build is not a replacement to the current system it's trying to build a better system in general and so who are you talking about who's trying to build that you're saying the internet is building so i didn't understand what who who who you're saying is building it in terms of okay so in terms of who's actually responsible for building the structure of DAOs?

No, I just in general, I think you said the internet is trying to be built in. So I didn't understand who you're saying is building that thing that you're talking about. Maybe I just, I thought you said the internet is being built by, and I didn't understand who you meant. Okay. So I mean, I'm not using specific projects just i mean in general so uh i mean of course trading is very uh uniquely positioned in a sense that we don't try to talk about individual projects uh in the degree that maybe you know one could be very very specific in in some ways and others can't um so broadly speaking when i say the internet, I'm referring to what you could consider to be, you know, the actual like darker or deeper web rather than just like a

specific chain or specific project. So in aggregate, I think if you think back to what the purpose of DAOs really are initially, I think that everybody has a take on what a DAO could be in specific relation to their chain per se. But I think overall, like the initial anticipation of what DAOs were supposed to be, at least from the first version was to be some kind of replacement for, you know, an actual structure for a company or a structure for some kind of organization, like say a Uniswap, something like that. I think like modern takes on DAOs are really just a great way to collaborate with fellow like-minded people. You know, whether or not you use one specific chain over another, I really think is, you know, at the discretion of, you know, the user, you know, whether or not

they love, you know, one given chain versus another. But broadly speaking, like I said, I mean, the point of these is not to replace existing systems. I think it's very, very kind of misguided to want to basically have a replacement for existing systems and saying that, oh, well, DAOs was supposed to be the solution to that, when the reality is, is like, I don't think they ever were going to be a solution for that. And so when people say that it's a bit of a failure, I question what the framework of what you initially thought, you know, DAOs could be in the first place. Like, I don't think anybody actually anticipated that my cap table would ever be, you know, a DAO. And so, I mean, it's aspirational for sure.

But like the realistic aspects is that it's just never going to be that, especially when it comes down to governments and ultimately who's going to take control of a company if you're doing something illegal, it's not going to be an autonomous vehicle. It just simply can't. Especially when you look at giant charts like the one that was shared around two weeks ago where you know amazon is essentially running half the servers that are um that are more or less uh responsible for all the nodes and the network you know so like you know this idea that oh we're going to have a completely decentralized autonomous organization there's so much systemic risk in that that it's just

the premise is basically broken from the get-go so So, but that's all to say that, like I said, within that lens of this is not a replacement for an existing system, I still do think that there's a ton of value in creating these autonomous organizations. And really pseudo-autonomous is what I'm trying to get at because the reality is, is there will always be some kind of systemic risk to these type of, um, uh, projects in general. But, you know, I mean, like I'm, I'm involved in a project most recently, which is like an NFT project, but, but more, more than anything, it's, it's actually just a great way for, uh, people to come together and like a collective agreement, like, Hey, you know,

this is a hilarious project. Uh, I mean, basically the premise is, is, is a meme in itself. Right. And so, but this is a great way for me to collaborate with actually 69 of my friends in kind of like an autonomous fashion. We all have to vote to actually determine what we do with the treasury that we're building. But at the end of the day, like this is a very simple way for us to have fun together. And, you know, I'm not trying to replace a cap table or anything like that. I'm just building fun projects on the internet. People that get super disgruntled about how I can't replace my cap table and stuff like that. I was like, yeah, I never wanted to.

I just wanted to have something to actually collaborate with my friends on the web in general. So I think that that's what I'm really excited about is kind of this very new experiment, not like trying to replace existing experiments. And I think in general, people that are, you know, coming to Ethereum to replace existing projects. I mean, I think that that thesis kind of was played out, right? Like we saw this idea that, you know, every government will have something on their balance sheet or take these more seriously. I just don't think that we're seeing that. Like, in reality, that was like, that was like the thesis of 2020, right? Like it never it never occurred. And so like, maybe one or two. Yeah, like, I talk about that all the time. I mean, if you go back to, you know, August of 2020, Saylor buys Bitcoin, obviously

puts it on the balance sheet, Tesla follows up, you see square and then nothing, right. And we thought that we were going to see billions and billions of dollars from sovereign wealth and from sovereign nations and from corporations pouring in. And what did they do? They all gave Andreessen Horowitz a few billion dollars to invest in Web3. But maybe that's what happened. But that doesn't mean that it doesn't mean. Go ahead. Maybe just a step on the way, just like, you know, crypto Bitcoin and Ethereum and other cryptocurrencies are just a step on the way to change the financial system. I would like to challenge that. I think the DAOs are, you know, a step in the way of creating more decentralized. And I would love, you know, I had, I hope none of my previous investors hear me.

I had a horrible time with investors. I would have loved a DAO instead of the board fights. I would, you know, 100%. And I think that to a certain extent, at least many of the projects that are considering DAOs for certain activities are absolutely looking to replace existing systems. Just like, you know, just like Bitcoin was initially created. And I think that most systems just like you know just like Bitcoin was initially

created and I think that most of the you know the initial crowd that you know was was kind of sucked into the the the Bitcoin rabbit hole was so lured because it's uh you know one lifetime once in a lifetime event where you can join a completely parallel potential financial system which isn't so fucked up to the bone in every step of the way. So I would love I'm happy to accept our new overlords with DAOs. Yeah, I think that it's just because we haven't seen stuff yet. It's never going to happen. Sure.

I do think it's going to happen in the future. And I do believe that Ethereum and technology similar will change systems. And I think that you can consider Ethereum to be a DAO. And I think that it's just, yes, stepping stones. These are things that just because they haven't done this yet or it didn't happen the way that we thought would happen with people getting into Bitcoin and putting on their balance sheet. It doesn't mean it's not going to be happening a few years from now and there'll be a better way to sort it out and progress. So I do think that it will be massive change in systems over the years. It's just a matter of the when.

Here's what you described with Amazon Web Services, basically everything being based on it. I mean, that's also one of the arguments a lot of people make against proof of stake. No matter how decentralized you get, you still can be shut down by a centralized authority if the internet... There is no cloud, right? I mean, there's no cloud.

It's just somebody else's computer. As long as... This is the change that needs to happen. And it's what I'm personally working on right now is that all of my infrastructure for Jax, for those that don't know, I run Jax Liberty. My company Decentral makes that product and we're in 120 countries and we support many different we've been building our infrastructure and building things to eventually get it in the hands of individuals. I have this theory that you just can't have a user-controlled internet, which is what Web3 has promised to be, without the actual person being their own server. In order to do that, there needs to be easy-to-run hardware devices that anybody can plug and play to be their own node and their own server to send their own transactions to not have to limit transactions based on government saying you

can't send that address like we've seen recently so i think the shift is going to be coming and this is what i'm helping to spearhead with a new product that i'm launching this year which is how do we turn everybody into their own their own personal server their own personal blockchain computer their own personal server that they can plug and play and connect directly to the protocols of whatever they want and send their own transactions and get all the blockchain data they need. And this is what I've been building for 10 years is how do we empower people with the tools they need to be in control of their digital life, their money, communication and identity. Jax is a non-custodial wallet. The keys are held by the individual, not by us.

But we're still a weak point that if our servers go down our users can't send transactions so how do we further remove the centralization that is happening now where we're seeing aws having 90 of all ethereum transactions or we're seeing larger blockchain cloud services providers that if they go down or something happens with them or they get regulated to the point that they can't be it's not no longer decentralized ethereum's finished so how do we further decentralize the infrastructure and that's what i think needs to happen so that these large power houses are not accumulating what the web 2 models have been and putting in the hands of individuals and that's something that sparked my continued um kind of motivation in this space is that this is what i've done and i'm building and that's our mission is to

um to to and i've got the computers right here at first glance but there we're building nodes that people can run in their homes very simply like a playstation 5 and and have everything they need to be independent so that if government knocks on my door tomorrow and says you can't send these transactions to it you're going to take your servers down off of AWS. It's like our nodes are being run by our users, not us. And that's what we got to keep moving towards, is the individual being empowered and not reliant on these centralized trust entities or institutions that are right now in control of about 90 to 90 something percent of all Ethereum infrastructure is in the hands of very few centralized trusted entities that could be persuaded or have different motivations than what people on Ethereum really want. And it's easy for developers to build on these systems, but that's kind of having a counter impact where the nodes are being

diminished and we need to increase nodes and increase the decentralization of node infrastructures. And that hasn't been happening. Now we've got like two minutes left, so we're going to do a quick fire round. Everyone's thoughts on what happens with Ethereum, not fundamentally, but I guess more just interest. Do you think that now that the merge has been successful, Pierce, like you were saying,

we need to wait for it to actually happen. Do you think that we're going to see sort of a mad rush for interest over the next few months in Ethereum versus everything else? And then we'll close up. So in terms of next couple of months, I would say the next couple of months have very little to do with Ethereum, but much more to do with the macro environment around Ethereum. And it's very unfortunate, but it's, you know, the fact, and it's so crazy, but it literally is the fact that, you know, some centralized organization, which is literally the Federal Reserve, has such an impact on such obscure things, such as,

you know, something like a new centralized layer one blockchain. I think in terms of over the next year, there's a ton of upside, I think, and attention. But unfortunately, in terms of like a near near term, it really is kind of mired in much larger, much larger problems. So overall, within our world, a rotation of interest makes a ton of sense. But from kind of the larger environment, you know, a rotation in retail interest, you know, this this type of kind of, you know, migration is still something that I think is caught up in the larger kind of scheme of kind of how the world is moving right now. So I'm super bullish on the on the medium term. Short term, there's just so much, you know, chaos that's kind of taking up the home screen, if you will. And that's kind of like the big issue, I think, overall is, you know, like kind of a, you know, stay tuned. I'm very excited to see, you know, what actually comes of the merge itself. But, you know, there's so many bigger issues that are kind of taking up bandwidth for retail investors, which is what I know, that they're just really not focused on kind of the incremental value add of, you know, a type of blockchain versus another type of blockchain.

Guys, I got to go. Okay, Anthony, go ahead. Thank you so much, guys. Nimrod, my friend. Good to see you. Scott, you as well. Pierce, nice to meet you. Take care, guys. Awesome. Thanks. Nimrod, your final thoughts good to see you. Scott, you as well. Pierce, nice to meet you. Take care, guys. Awesome. Thanks. Nimrod, your final thoughts. Thank you, Anthony. I think it's pretty much what Pierce said. I mean, everybody's super tied up to the macro environment. I mean, nobody's really, except from us crypto geeks, nobody gives a shit.

It's probably going to materialize. Just like the Havoc. Same with the Havoc. Exactly. Exactly like the Havoc. Exactly. Nobody gives a we'll probably see like some of the fruits of that in the next bull cycle just because it will be more scalable and we can see more crazy going on on top of ethereum maybe we'll see some downside with the other you know

layer ones like solana because that they were kind of gaining traction because of supposedly better performance. But that's it. I mean, that's it. Awesome. Guys, I thank you all for us. We had a lot of people that was kind of, we managed to not make it chaotic, much like the merge, right? It went off without a hitch.

But really always awesome to have both of you guys. Everybody who's uh following along we tagged everybody's twitters below the video it's too much to go through all of it um i agree with everything that you guys said basically right i mean i think that uh you know it's pierce who sort of said there's going to be a whole bunch of merge parties and i have a vision of people playing dungeons and dragons in their mom's basements from the 80s and screaming about why proof of work is better. I don't know. Maybe that's the kind of party that we get, but maybe I'm wrong. Maybe we're finally evolving. Everyone, I will be back tomorrow

morning at 9.30 a.m. Eastern Standard Time, of course. And that's all I got for you today. Nimrod, thank you. Pierce, thank you, guys. Cheers, guys. Always. See you all tomorrow. Peace.