Unchained - The Chopping Block: The New Ethereum Era: High-Stakes Trial, Wall Street Deals, and ETHZilla - Ep. 884

Episode Date: August 8, 2025

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest in crypto. With special guests: Avichal Garg, Managing Partner at Electric Capital, and Tomasz K. Stańczak, Co-Executive Director at the Ethereum Foundation. This week we get into one of the most pivotal moments in Ethereum’s history — from the Tornado Cash verdict and its chilling implications for developers, to Wall Street’s growing embrace of ETH through the launch of ETHZilla. The crew unpacks how this trial could redefine developer liability, why Ethereum’s narrative is shifting toward institutional adoption, and what the next decade could look like for the world’s most versatile blockchain. Whether you’re here for the legal drama, the market moves, or the inside scoop from Ethereum’s top builders and investors, this episode delivers the sharp analysis, big-picture context, and unfiltered hot takes you’ve come to expect from The Chopping Block. Show highlights 🔹 Tornado Cash Verdict Breakdown – Haseeb explains the mixed outcome: a conviction on one count, hung jury on the most serious charges, and what it means for Roman Storm’s future. 🔹 Developer Liability in the Spotlight – Why the case sends a chilling signal to open-source and privacy protocol builders across the U.S. 🔹 Inside the Appeal Strategy – How contradictions between DOJ arguments and FinCEN guidance could shape Roman’s path forward. 🔹 Avichal’s Optimistic Take – Why he believes the American legal and political system will ultimately land on the right side of crypto innovation. 🔹 Historical Parallels – Comparing today’s battles over smart contracts and AI to the legal fights over corporations and cryptography in centuries past. 🔹 ETHZilla Unveiled – Avichal introduces Electric Capital’s new Ethereum treasury vehicle, how it’s designed to work, and its potential impact on DeFi. 🔹 Wall Street Meets Ethereum – The crew explores how institutional capital could become a massive “supply sink” for ETH. 🔹 Potential Shakeouts Ahead – Why some public ETH vehicles may face activist investor pressure, M&A, or liquidation if they stay subscale. 🔹 Ethereum Foundation’s Vibe Shift – Tomasz shares how the EF is engaging more openly with the community, leaning into finance, and guiding ecosystem coordination. 🔹 Ethereum’s Resurgence – From legal fights to market dominance, why ETH feels unstoppable heading into its next decade. Hosts ⭐️Haseeb Qureshi, Managing Partner at Dragonfly ⭐️Tom Schmidt, General Partner at Dragonfly  Guests ⭐️ Avichal Garg, Managing Partner at Electric Capital ⭐️ Tomasz K. Stańczak, Co-Executive Director at the Ethereum Foundation ⁠Disclosures⁠ Links Beyond Stablecoins: The Case for Ethereum by Maria Shen and Sanjay Shah (Electric Capital) https://electriccapital.substack.com/p/beyond-stablecoins-the-case-for-ethereum  Timestamps 00:00 Intro 01:36 Tornado Cash Trial Verdict 06:16 Legal and Industry Reactions 09:25 Future of Crypto Legislation 21:13 Smart Contracts & AI Legislation 27:58 Introduction to ETHZilla 31:47 Community-Oriented Ethereum Initiatives 32:38 Wall Street Money in DeFi 35:08 Activist Investors & Market Dynamics 39:25 TradFi vs. DeFi 44:12 Ethereum Foundation's Cultural Shift 54:13 The Role of Ethereum Foundation Learn more about your ad choices. Visit megaphone.fm/adchoices

My perception with old EF was like not naming the fact that like the killer app is finance, right? I think it was always dancing around what like what is the world computer for? It's for finance. And finance can take many different forms. It can be prediction markets, it can be stable coins, be dexes, whatever. But like that is ultimately, I think, the killer app. And now it feels like we're naming it. We're putting our finger on it and like leaning into all those like great components.

It's a great use case. And it's a killer app. Not a dividend. It's a tale of two pawn. Now, your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways. Unnamed trading firms who are very involved. I like that ETH is the ultimate policy.

Defi protocols are the antidote to this problem. Hello, everybody. Welcome to the shopping block. Every couple weeks before we get together and give the industry insider perspective on the critical topics of the day. So quick intro, this is Tristan. Tom, the DeFi Maven, and Master of Mewis. Hello, everyone.

Joining us today, we've got special guests. First, we have returning guests of Vichel, managing partner and discount Tarun. I was wondering if you'd bring that up again. That's right. That's right. Welcome back. And joining us today, first time we have Tamash, Tomosh.

Tomash, okay. Tomash, Stunchuk, executive director and turnaround artist at the Ethereum Foundation. Thank you. Thank you for having me. Thanks for being here. And I've received that hype man of Dragonfly. We are early stage investors in crypto, but I want to caveat that nothing we say here is investment advice, legal advice, or even life advice.

Please see Chopin Block and X, Y, for more disclosures. So we are assembled here, at SBC in Berkeley. SBC is a science of blockchain conference, which is a kind of rotating conference that goes around the way. So we were lucky enough to catch the two of you here at the same time.

But we convened today at a pretty dark moment, I think, in the history of crypto and certainly of Ethereum, which is we just got the verdict for the Tornado Cash trial. So to give a little bit of background for those who were just tuning in, Tornado Cash was a privacy preserving

anonymity protocol of Ethereum. This case is probably one of the highest profile cases in recent memory in crypto because it's considered to be one of these milestone cases for the rights of developers and the liability of developers for developing open source software. So there were three charges. There was conspiracy to commit money laundering, conspiracy for unlicensed transmission of money, and conspiracy to violate sanctions. On two of the charges, the jury was not unanimous.

So there was a hung jury, which means that there is no charge, one way or another, and the government can re-bring the case. On the third charge, which was unlicensed transmission of money, he was found guilty by the jury. This charge has a five-year sentence maximum. The other two charges in concert were five years and 30 years. So the most serious charge, which is the money laundering charge, has a hung jury. Now, what does this mean? It's kind of a complicated verdict. So one, the prosecution can decide to refile the hung jury charges. don't know yet whether they're going to file, and I believe they have up to 70 days to make the decision whether or not they're going to refile those charges. The next step is sentencing.

Now, one of the questions up until sentencing is whether Roman is free to, you know, basically be free, go home, or whether he has to be remanded to jail awaiting his sentencing. It was decided by the judge that he should remain free. There's no reason why he would consider it to be a flight risk, and obviously it's a nonviolent crime. So the normal considerations about whether or not, somebody has to go to jail for this. So he's free until now, until sentencing. Now, Roman was asked by a journalist as he was leaving the courthouse how he felt. And Roman Storm said, reportedly with a smile, it's a big win. The 1960 charge, which is the unlicensed transmission of money charge, is bullshit, and we're going to fight it all the way. You know how President Trump said,

fight, fight, fight, we will do that too. So there were a mix of responses from different people. some people categorize this as being a partial win. Obviously, having the hung jury on the most severe counts is at least not the worst case scenario. And many people perceive that the money transmission charge was perhaps the weakest charge from a legal perspective. Because that charge, of course, is in somewhat conflict with what FinCEN has been saying.

In the Trader Cash case, FinCin said explicitly that Samurai wallet was not a money transmitter. And so it maybe is legally questionable why if FinCEN, the primary regulator is saying that you're not a money transmitter if you're non-custodial, then having a judge come out or a jury come out and say, hey, no, actually you are liable for this thing that the regulator said you're not liable for. There's a very strong due process argument that, hey, this is not, you can't criminally

convict somebody in a case where the law is this dubious about, you know, one way or another, where should this go. There's many other grounds for appeal. There was evidence that was not admitted. There's a lot of other things going on. But the next step for Roman is sentencing and then to file an appeal. This appeal will likely take a long time and will likely be very costly. So this is not the end of this case and we're going to continue following it.

But what should be clear is that this is not what we were hoping for. We were very much hoping for an acquittal or, you know, at worst, a hung jury on all counts. Him being convicted now means he has an uphill battle to face. And it's a chilling effect very clearly for all the developments. developers. It's no longer clear if you are building non-custodial open source software, where does liability begin and end? What are the rules that are imposed on you about what you should and should not do, even if you do not have control directly over the software? So these are questions that have to be now fought, and they have to be fought by all of us as an industry and by developers themselves in their

rights to build this kind of software. It's very clear. The stance from the administration, The stance actually we saw very recently from the SEC and their statements about Project Crypto were very clearly in favor of the idea that developers themselves should not be facing liability and we should not have this sort of Damocles hanging over their head if the government later decides it doesn't like what they're doing.

But it seems very clearly the DOJ in this case which began in 2022 is not in concert with the message we've been receiving from all of the other voices within this administration. So I'll stop there. I'll say, you know, when I saw this verdict, you know, my heart sunk. It was really hard to see that this is where this landed after all this deliberation from the jury. I think it took them like four, four or five days to get to this

result. But it was very clear that the jury was not going to get to agreement on these remaining charges, which I think I take that at least as some confidence that the most serious charges the jury realized it would have been absurd to, to criminally prosecute somebody for something that was not clear to them was a crime. So I'll stop there. I want to get reactions from you guys about Tornado Cash verdict. I think in some way this is like even an more absurd outcome than trying to convict on all the charges. I think obviously a lot of people view the case as sort of privacy and privacy preserving software being on trial, which it kind of was.

For your point, if, you know, Tornado is considered a money transmitter, actually having a hung jury. on money laundering and the Aipa stuff. But this logic, everything in crypto is a money transmitter. Uniswap is a money transmitter, running an Ethereum node as a money transmitter. Obviously, this is stupid. Obviously, this violates all sorts of theories, guidance put out by the government. And so in some respects, I actually think, I mean, and obviously we've sort of been talking about the RCA, which is now being coupled with clarity, sort of making it very clear

that like all this software is money transmission. licenses do not apply. And so I actually, it seems like in the future, it will be very obvious that, like, this was actually the wrong decision by the jury. Maybe that'll also be helped with an appeal. But it seems like it's actually safer for sort of privacy presuming software, which is the big thing that felt like at risk at this trial. Yeah. Well, so to clarify, when you put a case on appeal, you can't actually appeal the jury. You can't appeal the decisions the jury made. Well, you can't appeal as the decisions the judge made on the law. So the judge gave the jury very specific guidance about what are the elements necessary to satisfy a charge of unlicensed money

transmission? And I think probably one of the pivotal questions that will show up in the appeal is, you know, what is the difference between facilitating the transmission of money and being a money transmitter, right? The argument, I think that Judge Fala allowed to proceed in this case is that facilitation of money transmission does not require control or custody of funds, which is in direct contradiction of what Finsent guided. Finsent said, no, no, no, if you don't have custody, you not a money transmitter, end of story. I think she said, like, the FinCEN guidance was informal. I'm like, well, what was the point of it then?

Like, you know, what is the point of getting guidance from, you know, the government if it's not actually binding it anyway? Well, I think this speaks to two things. One, I mean, for crypto and AI, you start bumping up against these definitions, which were created and conceptualized in the world so far before any of these technologies existed that we kind of have, this is, I don't know what other process you would go through other than the court system and in sort of parallel legislative process to sort of re-litigate effectively what the definitions even are.

So in some sense, I interpret it. I actually think, maybe as a side note, I'm also chairman of the board at CCI, the Crypto Council for Innovation, which is us, paradigm, Andresen, Fidelity, Block, PayPal, so if I just joined. So it's a bunch of, like, you know, credible folks and Tradify folks. And so we do a lot of advocacy work in D.C. and I think to me, I suspect will end up in a good place. Actually, if anything, the lesson of the last, let's say, three to five years in the U.S. is that if enough good people have credible, grounded arguments, eventually you can convince

enough people and then the laws will change and the environment will change. And it's not easy, it takes work. But I think the American system is actually a pretty good system in this regard. I don't know what other path there would be other than somebody like Roman going on trial and then people sort of having to litigate it that forces the issue. So I just look at it as sort of like a necessary, it's like unfortunate that there's this individual whose life is now, you know, impacted and there's consequences to that.

But I don't know how else you would do that. And at the same time, I'm actually quite optimistic because this is really complex stuff, right? Like trying to explain to the average, he was in New York. Was that where the trial was? Yeah. Like, you're finding random people off the street and then you're trying to explain how some more contracts work to them. Like, that's actually really complicated. And so the fact that, like, they got to the right place on two out of the three to me suggest, like, wow, that's actually pretty remarkable that people are able to deal with this degree of complexity.

And I'm actually cautiously optimistic that as painful as it will be eventually it will get to the right outcome. Like, if you just look at the history of cryptography regulation, for example, in the United States, like it eventually gets to the right place. It just, it's painful to get there. So I don't know, I'm cautiously optimistic. Like, I kind of feel like it'll, to your point, it's just like on the face of it, you look at it, you know, like, this is kind of ridiculous. this doesn't make any sense. There's too many inherent contradictions here. And whenever you see that kind of attention, actually, ultimately, I think the American

system gets there. I'm going to butcher the quote, but it reminds me that you guys might remember. There's that traditional quote. Yeah, yeah. It's like, effectively, it's like you can always count on the Americans to do the right thing after they do all the other things. And so we're just like in the process of doing all the other things. Yeah.

I mean, you know, one of the principles of criminal law in the U.S. is the concept of fair notice. And the concept of fair notice is that a, I believe the way it stated is a person of ordinary intelligence should be able to understand what is prohibited and what is not. And this was one of the arguments

that was brought up in the motion to dismiss is that, you know, for these particular charges, there was not fair notice, right? And I think to us, that's really obvious is that, like, I've spoken to so many crypto lawyers and nobody was able to really predict how this trial was going to go. Even when the charges were initially brought,

But if lawyers don't know what the fuck the government is going to decide is the right answer or the arguments that they're going to bring, then how would a person of quote-unquote ordinary intelligence be able to decipher them? So, you know, I think from the government's perspective, as you should say, from the judge's perspective, you know, Judge Fela, I give her a lot of credit for having, I mean, this is kind of a case of first impression, meaning that it's the first time anybody has gone on trial for something like this. and there are like there's no case law there's no precedent this is really the first time the legal

system is grappling with this question and of course she's going to get stuff wrong and she's got to make game day calls and you know you're just you're there in a courtroom and you're just trying to figure it out and so I don't I don't think it's necessarily an indictment of our legal system to say hey you know the trial court the district court probably got a lot of things wrong and to your point we should maintain optimism that the entire process is not finished yet. The entire process involves more and more judges, you know, appeals court judges, looking back over the record and deciding, hey, were all these legal calls correct and were the arguments that were not fully considered or fully understood at the time. At the same time,

I also don't want to be, I'm saying when the same way you are that I think Roman will ultimately prevail. And I think the more people who see this at higher levels of abstraction will realize like, hey, very simple rules about like what is the standard for bringing. in criminal charges against somebody would dictate that, you know, look, this might have been questionable. This person shouldn't end up in prison for it, right? Until you pass a law that's very clear to everybody involved, what the rules are, nobody should be going to prison for it. That's what you say.

Like, you would ask the lawyers and they wouldn't be able to predict what the outcome would be, but if you ask the ecosystem, the community people, the experts, they know exactly what the outcome should be. So then it's hard to talk about the partial win because what you would expect is the acquittal on all the charges. And I think this is one of those battles that, like historically when we look back, when we look at right to cryptography, PGP, and then you look at the D.R. Schwartz case, and all of that happened.

And we remember those battles. And then after years, it's so clear to the public that what the outcome should have been. And each time, there is someone who is really suffering. Like that's one person that is being placed and has to go for that hell. And I think that's the case for Roman. and probably focusing on the fact that he still has to continue that battle. And it takes it as a representation of all the ecosystem, all the community, saying, look, this is something to fight for.

And that's a massive thank you to Roman Storm and his team that did he actually stay there and continue fighting. It requires courage. But it's something that is definitely very much worth fighting for. It's also worth pointing out that this case, itself is obviously very, very atypical. But it's also extraordinary to the degree that when the government brings charges against a criminal defendant, they win a trial 96% of the time. Equidels are extraordinarily rare. So even to end up in a hung jury like this on the most significant counts is itself a testament to the fact that this is an extraordinary case. And it's one that very clearly, you know, 12 people

from the jury, like my, my, my greatest fear was that you grabbed 12 people off New York and you show them, hey, here's a Russian guy and he made it, you know, money was flying around in North Korea used it. They said, well, obviously, that's money laundering, you know, what else could it be? That they were able to grapple with the seriousness of the question enough to say, hey, it's not, it's not clear. And that's why our criminal system has this demand of unanimity, that it's not enough for most people to think one thing or another. It has to be absolutely clear to everybody that what this person did was criminal. And it wasn't.

And this was after what, like two Allen charges, too, from, from family. So it's like, yeah, trying so hard. And yet it's not obvious. Yeah. Yeah. It's really, I'm telling you, like, I went in so skeptical when I first started CCI. You know, I started engaging in political stuff two years ago. And I know it can like, it's a grind, but I'm just like coming out of the last couple of years.

I'm just so optimistic. I like, I still can't believe we got like a stable coin, you know, legislation, like the SEC turned over. Like, I don't know. I kind of, I think it'll be okay. It's going to be really painful for Roman, which really sucks for him. And all credit to him for powering through and continuing to be optimistic about kind of his path forward here. But I don't know, I'm cautious. I'm more than cautiously optimistic.

I think it'll work out okay. It won't be easy, but I think it'll work out okay. The trial was anchored in a situation from two, three years ago, right? When we had absolutely no clarity. And if we observe what's happening now, it's great that's happening in parallel and all of the shows that optimist towards what will be there in the next one or two years. So as you say, developers might be feeling on one side a bit afraid of the results, but also they understand that there's lots of guidance that says, in the meantime,

there is clarity coming that says, no, you can build. You can build for privacy. You can build for the solutions on blockchain. And you can fight for all of this that we all believe in. And actually, it's no longer should be feeling if there's a fight. it should feel like simply delivering the software for building the future of finance. That's becoming very clear. I wish that were true.

But at the end of the day, like a SDNY, SD&Y stands for Southern District of New York, which is the federal system in which these charges are brought. St.NY, the joke is that SD&Y stands for the sovereign district of New York because they kind of just do what they want. They're sort of like these cowboys with respect to their pushes of, hey, this is our jurisdiction, it's such as finance, so we're going to go after it.

And what you can see very clearly is that there's not a synchronization between SD&Y and what the general administration is saying, and certainly not what the agencies are saying. And when the government itself is not in unison, right, because we talk about the government or like the administration as though it's one thing. But the reality is that it's not. And Roman is face to face with the element of it, that's not.

And if you're a developer, like, and the reason why I say this is that at a certain point this becomes a political demand, which is that, hey, hey, hey, you're telling us this one thing, and at the same time, this developer was just indicted for doing what you're telling us you want us to do. And the only way that gets resolved is through the political process, right? And so whether that's clearly passing a law like BRCA that clearly defines, BRCA stands for blockchain regulatory clarity. Regulatory Act, yeah, which clearly defines what are, because right now, the reason why, you know, Roman got caught in these cracks is because we were trying to read between the

laws that were written, you know, 50, 100 years ago. And how you can read that is very up to discretion of a judge, or up to the discretion of a prosecutor, for that matter. The only way you're going to totally avoid that is either passing a law or, like, having some kind of resolution to the criminal case itself. But until something is resolved, this tension is going to remain there, right? The line prosecutors at the SDNY are still there, and they still have the discretion to bring whatever charges that they want. So if the next person builds a privacy preserving protocol and they think that they follow the rules, but North Korea uses their shit, it's not clear from these prosecutors what will stop them from coming after you. So as much as I appreciate the optimism

that you're delivering, I want people to be fucking angry about this. I want people to be angry. I want people to feel the injustice and do something about it because the political process is ultimately what determines will this discontinuity or will this contradiction actually get resolved or not. It, um, there, two, two outs on this. One, um, I mean, there is, um, the history here, too is, I mean, when were these charges first brought like three years ago, two and a half years ago? Yeah, two, I believe.

Yeah. And so, you know, there's there, the, the way sort of oversight of these folks works, too, has changed, right? So like Jay Clayton is the new, the new, um, U.S. attorney for SDNY. Um, he was, you know, uh, prior to going. in. He was an advisor to Electric, so I know, I know Jay really well. And so, you know, the reality is there is a prioritization queue that happens in these situations. And I don't, I can't, obviously can't speak for Jay, but I have a tough time believing that given his prior, you know, stint at the SEC

and CFC and the public records that he has, that he would have brought something like this. And so I think there's, there's some solace at least that like, at least temporarily there, there, I think will be, you know, more of an alignment between between the parts of the government. but I think you're right that the long-term fix ultimately is probably legislative. And that is actually where we need to keep the foot on grass. And I actually think there's actually a really interesting opportunity here for the right legislators. I've been pitching this behind the scenes to a bunch of people. Have you guys heard my rant on like LLCs?

No, no. Give me the LC rant. So it sounds like super dry, right? But it's apologies for anybody who's watching who's heard me rant about this. But if you go back and you look at the history of the, limited liability corporation, super interesting. It sounds super dry, but actually is very, very interesting. And the reason it's interesting to me at least is it's actually a technology, right? And so like creating the notion of a corporation, like a joint stock corporation,

let people put money into a vehicle and then let other people take that money and go pursue risky things with it. Right. So the first joint stock corporation was the Dutch East India company and it went and became the most valuable company in the world. And before that, all you had was the ability to use your personal capital. So it was essentially the cottage industry or you had a king who had a lot of money and they could go pursue these kinds of endeavors. And so it's actually a technical breakthrough. And so roughly from like 1648 to 1850, let's say, it's about 200 years. In order to create a corporation, you had to go to the king. And the king had to give you a charter and say, hey, go create a corporation now. And so some very smart people in the UK and the US said,

wait a second, why do you have to go to the king? We don't even have kings. Why should you have to go to the governor? Why can't you just fill out some paperwork and start a company, start a corporation? And that was actually a big breakthrough because now anybody could create a corporation. And so you could start pulling money and you actually got this happening. And it happens coincide with the Industrial Revolution and the financing of the railroads. And so I don't think you get railroads or factories without this technical breakthrough in the law. Law is very technical. And so it's a remarkable thing that happens.

But if you go back and you read the discussions that people are having at the time, like the journalists or the politicians, they were talking about some really foundational things like, well, what happens if a company kills somebody? How does liability work? Is it people to give the money? Is the people that work there? Is the company liable? What had, do they have, can they participate in politics? Like, do they have free speech rights?

How does banking work for these things? Because what we did for the first time was we used to have humans and we understood what a human is as an entity, as a counterparty to a transaction, all these things. And then you got companies and you're like, well, what is this? This is like a non-human entity that somehow has to like interface with a bunch of humans. And so you get these sort of like quasi people, if you remember that quote, like corporations are people. And like in many ways corporations are people, but they're not in certain ways, in very important ways too, right?

And that had to be litigated and took a long time to sort of figure that out. I think this is for the first time since the 1850s, that we've had to deal with that. You now have smart contracts and AI, which humans can talk to and be on the other side of a transit. And they can be counterparties to a transaction. They can talk like humans. They can transact with humans.

They can pay humans to do. It's like, it's a weird world that we're in now. And we have to relitiate all these things, right? Like, who has liability when a piece of code does something? Is it the original developer? Or is it the person who ran the code? Or if the code's running on 100 servers at once?

Like, how does this work? Do they have free speech rights? Can these things participate in policy? how does liability work? How does indemnification work? They're like actually all of these foundational things that actually we have to now think through for the first time in like 200 years. I think it's really interesting opportunity for somebody to do a, you know, like, seminal piece of legislation with their name on it, like even bigger than like the Stablecoin Act

or even bigger than like Dodd-Frank, like something that goes down that's like, no, no, no, here is how humans and smart contracts slash AI will interface with each other and here are the rules around that. I think there's, Romans hitting on like this one particular point of friction, but there's like, I can point at a dozen other points of friction that we kind of don't have answers to that somebody needs to sit down and actually think about and like write the rules for. Yeah, there are big questions just around the corner, as you say. And I feel this is also promising that you see regulators that already start talking about the legislation for the blockchain,

but they know that much of it refers to AI as well. So we tackling smart contracts in AI, maybe this is a bit of an ally for all the companies. conversations about smart countries, Dow's governance, that we have to start thinking of what, if it's an agent and AI, taking decisions and acting on behalf of itself. So packaging needs together. I think there's lots of similarities and also we start building more and more often, the contracts that will be integrated very deeply with agents and AI. So it has to come together and good to see that accelerating. So how do you think liability should work if your AI, you deploy an AI, your AI goes and, you know, shoots the president.

What? I, short answers, I don't know. But, I mean, that's a great example. Like, what happens if an AI pays a human to, like, do something in the real world? Like, where does the liability sit? I think you, I think the only way we're actually going to be able to litigate this is probably at the end points. So it's kind of like K. There's a parallel to KYC in the blockchain systems, which is like, I don't think you can,

you can, like, litigate it on chain very easily, especially like in a global context. Because that's the fundamental assumption that's changed now, too. It's like, I don't know if the counterparties even in my country. So, like, what even is the notion of jurisdiction? Like, before, everybody's in Delaware. And so, like, that's an easy thing to litigate. Here, it's like, what is jurisdiction? It's on the internet, right?

So I think the only way to really police these things is going to be on the endpoints. So it's like, when you want to move money back into the banking system, we got you. If you, like, commit an act in the real world with an unlicensed firearm, we got you. And so I practically speaking, I don't know how else you do it. Maybe somebody more creative than I out there could come up with something better. But that's the best I've been able to come up with is just like you're going to have to litigate that, like, the actions at the endpoints. are where there's liability. But it does work only as long as you have that banking system endpoint.

So at the moment when we move entirely to the digital economy, then suddenly you have to start building those barriers somewhere else. I think that there is opportunity that much of those aspects of blocking the flow of money will be built through the smart contracts on top of neutral layer. Not that this is maybe the most desirable outcome, but I feel that's where it will go, right? So you'll have compartmentalization of the financial systems built on top of the neutral layer of blockchain of Ethereum. And as for the cross-border aspect, I feel the same.

We'll be answering lots of questions of how can we, how can we make it work finally, that you can get insurance that will work globally, that you can get access to your systems that will work globally, that will get health care, health care insurance that will work globally, and so on and so on. So the travel link will be kind of respectful for the local laws, but also very much borderless. This is one thing. And then maybe we'll start thinking about the cultural aspect of training AIs and we'll see what goes in and how we approach it. And we'll take a bit of responsibility about those like parents taking responsibility of a child,

but then trying to understand when the AI actually grows enough to be responsible itself and like starting to ask questions about identity and privacy of AI and thinking, trying to delineate this moment when the AI transitions to be its own identity, entity that you can actually punish by saying, well, we have to disable this one. And probably lots of crazy cases will come out with. I like his answer. We should just ask the AI. Well, like the AI is smarter than us.

We should just ask the AI what the answer is. I want to switch gears now to talk about some big news that you guys, or you specifically announced last week. which is the launch of a ETH Treasury vehicle called ETHZILA. So for those of you who have not, I think we've talked a lot about micro strategy, and of course there's been this generation of micro strategy-like companies for different digital assets aside from Bitcoin.

There's a few now that have been launched for Ethereum. You guys are the latest, and a lot of the excitement around ETHZILA in particular has been the different way in which you guys are using the underlying assets that are being raised. So talk to us about what is ETHILEA, what are you guys doing with it, what's different about it relative to some of the other vehicles that have launched.

Yeah. So I guess at the highest level, I think the Treasury phenomenon is an interesting one. I think it's going to, I think it's still early. There's a lot of people talking about how it's, you know, it's peaked and it's like kind of game over. I get three pitches a day still from bankers. So I don't think it's, I don't you guys should do probably as well. Yeah, we get a lot of pitches. So I don't think it's anywhere close to over.

I think it's going to take quite some time for that to work through. And it's because there's just essentially this, this, this, financial markets arbitrage that's happening, which is there are these massive credit and debt markets. And they will be willing to finance against collateral and make money. And from a company's perspective or an entity's perspective, if you have collateral and you can borrow against that to essentially put more assets on the balance sheet, you're arbitraging the capital market is because you can borrow at zero to 10 percent with some duration and go buy an asset that goes up 20, 30, 40 percent a year. And so I think what Saylor proved was like,

like you should, if you can do that, you should just do that all day. You should just turn the crank and he's now bootstrapped essentially a $100 billion company, which is pretty remarkable. And so, you know, we've participated in a couple of these. We did, from the electric side, we did S-Bet with Joe, and we did BM&R with Tom Lee. And we're also committed to Andrew and Dave Marin's thing, which is a different sort of structure that goes out later this year. We're talking to a couple others. And the way we thought about it was, and then we sort of, and then we sort are a little bit more active with ETHSILA, which is currently known as 180 Life Sciences. And it'll get rebranded soon, officially.

But the way we thought about it was this is from a crypto perspective. I think there's a couple of opportunities. One is these are permanent capital vehicles that will basically, if done well, they just suck in Bitcoin or Eith or Salonar or whatever, and then just never give it up. And so you have massive supply sinks. And so anybody who's been around in crypto for a while understands the value of having like high quality supply sinks that just suck in, suck in supply. Two, I think as constructions, if you believe in the potential store value characteristics

of the underlying asset, like a Bitcoin underneath, it's a really interesting and unique opportunity. Like our house view, Maria on our team and Sunday on our team a couple weeks ago published our sort of our ETH thesis and sort of how stable coins unlock massive, massive growth now for ETH the asset. And our house view is ETH basis. is where Bitcoin was in 2019. It's 10 years into its journey,

just turned 10 in July, right, a couple weeks ago. And if you look at the history of Bitcoin, and when Sailor started to do strategy, sailors started to do strategy in 2020, right about the same time in terms of Bitcoin's evolution. And it was really between like January 2019 and 2024 that Wall Street figured out Bitcoin. Like that's when Paul Tudor Jones flipped.

That's when like drug flip. That's when everybody sort of said, wait a second. Maybe this is actually a thing. And to us, history sort of rhymes in this way. and I think that's what's happening with the eth now. Like I think over the next five years, people will say, wait a second, this has a lot of really unique properties and characteristics, and people should own a bunch of it.

And so then we were talking to some folks. We worked with the etherealized guys on this, so Danny Ryan, who was at EO for a while, and Vivek and Grant, and said, if there's a vehicle that could be much more community-oriented, that seems kind of of the ethos of Ethereum. And so the etherealized

folks, us, some Wall Street people, and then a bunch of DFI founders decided that we would try to bootstrap something like this and try to make it happen. And so we have Constantine from Lido, we have Sri Rang from Eiger-Weirang from Eiffin, we have Mike from Etherfi, you know, you know, on and on. And so I think Tarun and Robert. And so we sort of went through and said, who are the most thoughtful people in DFI that actually understand the on-chain economy? and can we essentially create a group here and call it like a defy council. And those are people that can then advise this company alongside us on how to actually use these assets on chain. Because that's where the stuff gets really interesting is like not only do you end up with essentially a supply sink, but then you take all of that Wall Street money, potentially between tens of billions of dollars, and you pull it back into defy.

And you use it constructively inside defy. And you can use it an intelligent way to bootstrap new protocols. And so that's what electric's doing on the back end is we're going to help the company move these assets on chain. and actually use them productively and try to actually help new things get off the ground that are good for the ecosystem and do it in ways that ultimately generate more yield back to the company. I think it's a really interesting phenomenon.

I think it'll be not financial advice. It'll be interesting to see what happens over the next 12 months with rate cuts and how these things move. Almost certainly most of these things that are going out will implode and it will be bad. It's like an ICU boom. It's just like any other speculative boom.

For example, I think there will be a bunch of these across assets that really, it doesn't make sense because they don't have store value characteristics. Inclode sounds bad, though. You don't think there won't be like a graceful wind down for the ones that don't work out. I think it will be

less than graceful, but not like... Define, what do you think will actually happen? Well, I think it's going to happen. Yeah, it'll be like controlled demolition. No metaphor. It's just like, why will it really happen? Literally will happen. So I think you have

you have a couple of different actors in the space. I think a bunch of these things end up subscale. So if you can only raise $250 million or $300 million, like we ended up closing $425 on the equity side. There's $150 in debt that's slated to close pretty soon. There's shelf offerings and ATMs. There's all these financial engineering tools are available. So this vehicle will get north of a billion, I think. And, you know, Tom's like $3 billion.

I think Joe's vehicle was at like a billion a half, something like that. So I think if you can get above one, you can spend enough cash that you can finance the operations. of the business, right? Even off just based staking yield, you can make $30 million a year, you can pay all your operations, and there's just a fixed cost of being a public company. I think there's going to be a bunch of these, maybe in ETH, maybe in other assets, that are at like $250 or $300. And that's just not enough to stay public. And today, these things traded a premium to NAV.

So if you have a billion dollars of ETH on the books, you might trade it $1.5 billion, let's say, is the equity value of your shares, which opens up all sorts of possibilities on this financial engineering. But there will come a day where these things trade. at a discount enough. They'll trade at like 80 cents on the dollar. It's like GBT. We'll go into that part of the cycle.

The thing with GBT was it was private, so there's nothing you do about it. You couldn't release the assets. In this world, I think what you have is activist investors come along, buy enough of the shares, and then pressure the company to liquid at the assets. Wasn't that also true for GBTC? Is that if somebody acquired majority of the trust, they could have dissolved the trust? I think it was sufficiently illiquid. I have to go back and read up on it because I think BITWISE had some similar things too.

I think it was sufficiently illiquid that practically speaking would have been quite challenging to do that. I also suspect the way Grayscale was set up and kind of the way Barry is very smart about this kind of stuff. The way he tends to operate, almost certainly there was a like eject button where like, you know, Barry says, nope, sorry you can't do that. He's very smart about these kinds of things. Which is why I think their IPO will go well.

He's just very good to get this kind of stuff. I mean, it's a monster business. They do something crazy like 600 million a year in revenue or something. It's like a monster. Most of you see. Yeah, it's like a crazy business. Yeah, it's a really crazy business. So anyway, I think these activists will come along because these are public companies.

And then you have a fiduciary question, right? It's like, well, if you're the board member or the CEO, one of these things that's trading 20% below nav, yeah, you probably should liquidate if you don't have another plan. And so there's like a free 20% sitting there that can be captured by activist investors. Well, so many people have speculated that it's not activist investors will come in, but rather M&A. Is that like the bigger vehicles will acquire the smaller ones? I think that'll be a thing too. They'll pull up the MNAVs because they're trading. It's a bigger ones are trading it better.

Exactly. So I think that'll be a thing. to, I heard somebody actually talk about a really clever idea. I don't know if they'll do it, but I think it would actually go over well, which is that Sailor would buy these out. For other assets? Correct. And then turn around and dump the assets to go buy more Bitcoin, which I thought was brilliant, actually. You could totally imagine, because they have so much leverage, they have $100 billion of assets. They get the most preferential terms on the credit markets. People love them. And so actually, you know, as a sort of Bitcoin maxi, you could

totally imagine, like, the community would love that, actually. They're like, yeah, go take all these shit coins and, like, dump them and crush them to go buy more Bitcoin. That's awesome. Yeah, but is that bullish Bitcoin, or is that just like, you could buy anything and then sell it and then buy more Bitcoin, you know what I mean? It's like, yeah. If you have free money sitting on the table, right? Yeah, yeah, it's a free 20%. You have a huge MNAV gap. Yeah.

Then it's like, yeah, you can buy it, dump it and I mean, it's, it's free money only if you can acquire it at. Yes. Yeah, yeah. Like, if you know, you're willing to take that deal or if they know you're going to dump it. I mean, it's, it's, it's generally under the umbrella of activist investor. So it's like if you can secretly acquire 5% or 10% of the company and then pressure them, like, yeah, it could be some activist PE hedge fund guy or it could be Michael Saylor. Right. Right.

And like actually to your point, if you, if like a strategy continues to trade like a 1.5x MNAV in a bear market, everybody else is trading at a 0.75. It's just an arbitrage. He should like buy as much as he can. They have to sell it. He not only gets to 100 by like liquidating the assets. He turns around and buys Bitcoin and turns into 150. Right.

And so it's like actually an amazing arbitrage from Saylor's percent. And that guy is a financial engineering genius. Sounds like what you're advocating is by Bitcoin. No, no. Is that not the hedge if you think this is what's going to happen? Well, I think from an investor's perspective, I think there's a question about which of these assets are ultimately durable. And so if you're going to choose to take some exposure here and you think that there's

like vehicles that come out on the other side, because I do think on the other side, there is an opportunity to build something really interesting, which is if you can end up with, let's $3, $3,000 billion in this cycle, and you think ETH is worth $10x what it's worth. ETH is where Bitcoin was in 2019, when it was at like 8K or whatever, or 10K, you end up with an asset that has $30 billion in it that's valued at 1.5XMNAV, so it's worth $45 billion. And it produces a billion dollars a year of free cash flow, right? Because the staking yield at 3%.

And then you can take that and do relation to things with it. And to me, that rhymes a little bit with like a Berkshire, where you have this sort of like obviously good asset in an insurance company that spends cash, and you take those assets and that cash flow and you like go invest in a, other really interesting assets. And so there's like an interesting crypto version of that that I think somebody could do that you start to like roll over really interesting crypto businesses that are just cash flow businesses that somebody could pull off. And I think that's where it gets like a little bit more interesting. But I think there's going to be a messy middle. Like I think

a bunch of these things are going to be subscale. They're not going to be able to stay public. A bunch of activists will go in and make their 20 percent. Maybe Sailor is one of those people. There's going to be mergers. So it'll be it'll be gnarly messy. But yeah, from our perspective, we're like, you know, there's definitely an opportunity if you are, if you're a believer in some of these assets fundamentally to go tap a new part of the credit markets. The other thing that's just interesting is like intellectually, it's fascinating. It's like so different than venture. I learned so much going through this process.

And it made me so bullish crypto because you work with these bankers and you're like, oh my gosh. Like I can't believe like PDFs and emails and phone calls. And it's like so messy. And like most of these lawyers can't even use Google Docs. And so they're passing around and you're like, you look at the file names. And it's like, it's like a 11 final underscore underscore. I'm like, I'm like, I literally, I cannot, I've never worked on Wall Street.

I'm like, I can't believe we're in 2025. And the way we're going to like figure out what the version of the press releases that we're going to use is like, you know, press release underscore V32, parentheses, RG edits and parentheses, like, underscore final final. And you're like, this is really what I can do in 2025. This is the opportunity. No, totally. To show how messy the traditional finance was.

And like if, if ever, like, as you say, many things can go wrong here. And I feel that big part of the guidance, what are. from the German Foundation at the ecosystem should be to learn how to scrutinize every single vehicle here, how to audit the processes

and how to look at the DFI part and the TRETFI part. And I think that the messy aspect may come very much from the traditional finance way of wrapping the DFI. What is a beautiful opportunity is that as we,

previously in the last years, we've seen adoption of cryptocurrency and the custodial services. The Trotify learning how to simply hold assets under balance sheets. What we're opening now is that hybrid model when they start interacting with Defi processes.

And on the TIRAN Foundation side, we can provide the guidance on how DTI should look in a future to deliver the values that we strongly believe in. So how we can build DFI that is privacy-oriented permissionless, how we can provide the non-custodial services to everyone and start integrating into the traditional

finance systems and show everyone that that way of transition entirely towards the defy and Ethereum economy. They end exposing, like the lack of clarity, lack of transparency that is hidden behind the all the paperwork of the past. And I'm not saying that in these particular cases, there will be a necessary lack of clarity. But we've seen that in the past with FTX collapse and so on. The things that you, or 2008, 2009, the things that you couldn't unwind, the things that you couldn't track was all the traditional financial ecosystem when you realize that the root

of trust are really scattered and hard to find in the moment of disagreement on what the balance sheets are. And then you look at blockchain and that's where it actually provides all the transparency, all the resolutions, automatic settlements. Defi is so much better. That was like my takeaway from this whole process is defy is so much better. And the hope here is you end up with a lot of assets inside ETHSILA in particular and we can move those on chain and support DFI. also that we can, like, I think it'll be, it's kind of related to the Roman thing, actually, that we're just talking about is like, the opportunity here, I think, is for the defy people to go in and capture Wall Street rather than the other way around.

Like, I think it would be a failure if a bunch of Wall Street people came in and tried to, like, institutionalized defy. And we just ended up with, like, a bunch of, you know, value extracting, like, you know, people who don't really understand what these things can actually do, co-opting it. I think that would be a failure state. A success would be there's people who actually understand the power of this stuff and actually we backport it into Wall Street. Or like, no, no, no, you should actually run this on an L2 with these kinds of smart contract

construction and you get privacy in this way. And this is better. And like having some leverage to go do that into Wall Street is also, I think, quite interesting. So I've been thinking about my message for Wall Street going to New York next week and thinking of talking about Ethereum and the message should be really that we've built it together. You know, when defy people look at the history of finance, like we're, like, we're we've been learning of what exactly are the financial instruments. We knew the technology.

We started building experimenting. And I said, oh, okay, this are this more and more complex instruments, how we represent them in DFI and how we improve them in DFI. And on the side, you had all the Wall Street traditional finance people saying, like, we're limited by regulation, by the compliance. We cannot move there, but we start to understand that this is a better system. And now connecting those two worlds and almost like celebrating together, that we've built this, that we've invented all the financial systems,

the financial instruments that really solved the problems of risk in financial markets, right? But then in the past, we didn't have the tooling that really delivered transparency and settlements and the global agreements and everything. So thinking of it as a success of both sides, having new tooling, new technology, but also through all the engineering, financial engineering to address all the risk challenges. That's great. So speaking of Ethereum Coin on Wall Street, let's talk about the general zeitgeist right now Ethereum certainly has the wind that it's back.

I think over the course of July, Ethereum was up over 50% in a single month, just to eat the price. And it feels like everything is turning up Ethereum right now. So you mentioned BitMind, which is Tom Lee's vehicle, is just gobbling up AUM. He's on CNBC every other day,

bull posting about Ethereum. And it seems like now there's like sort of a narrative shift that's taking place to the remarks you just made. like Ethereum used to not talk about Wall Street. Like I don't remember, you know, from 2020 to 2024, any kind of like, oh, Ethereum's about Wall Street and, you know, getting assets tokenized and getting them to do that. I mean, there was maybe some, obviously there's always some undercurrent of it. But now it feels like it is kind of the official Ethereum, call it narrative or meta-narrative maybe. And I think a lot of this has been promulgated by Tom Lee, who's been this, you know, tireless Ethereum advocate to.

to Tradfai and to traditional retail audiences who may be before the position of Ethereum is that it's world computer, it's unstoppable, it's maybe it's about Defi. Now it seems like the narrative is much more about Wall Street and about this is what Wall Street is choosing. This is where the stable coins live. This is, I think, what Tom Lee often says, it's the chat GPT of crypto or I don't know exactly frames it. But this positioning feels like it's very different.

And it's very much working. I would say this is really would be going far to say Etero is Wall Street. It's much more. It's just opening to all the Wall Street cases of bringing the finance and global economy to Ethereum. But at the same time, we're just having lots of conversations in so many different areas. So we are very open to communicate with financial organizations. And we answer questions. And as you say, maybe in the past, that was just not of interest of the foundation.

of other institutions of the interi ecosystem. Now we say it's a critical moment. It's a pivotal moment when the regulation is changing and hopefully this will spread globally. So you have to be responsive and say, yeah, okay, that's how you do it. Don't go the wrong way. It will help you to see where the security is,

how to solve all the problems and have clarity. It would be really disaster if just those people who are now open to build on Ethereum couldn't find a good advisor on how to do it. So you think this is very much a part of Ethereum's reshift post the shakeup earlier this year? It's part of

being open to communication everywhere where it matters. And at the same time, we're talking about lots of privacy initiatives. We go to build ourselves and next thing is of Ethereum. We start talking about AI, about governance. And be on all the podcasts. And it's a pleasure to talk to you. And

be everywhere when people talk about NFTs, they invite us. We talk about NFTs. We talk about art. We've got talk about the value, the identity, about the big challenges for humanity, really targeted by Ethereum when talking about where decentralization is. I will say, I think this is, Tomasch's being, I think, a little humble, is like, I think if you go back to the beginning of the year and the last year, November, most people, I don't think it's a stretch, most people who have been in crypto for a while, and especially people who have been in the Ethereum

committee for a while were very frustrated with the EF. The Ethereum Foundation, people were extremely frustrated. And it started to spill over and you could see it publicly. And the tonal shift, I think post-Tomash coming in is just night and day. We just had our founder summit. Last week we do an annual summit for electric capital portfolio funders. And literally five people came up to me and were like, dude, what happened? Like, the EF is talking to me.

Like for the first time, I've been in the space for like six years. And for the first time somebody from the EF actually reached out to me. Or like I got the IDM, Tomash. He just like put up his calendar league on Twitter. Twitter and like I just DMed him and he was like okay to talk to me and they like almost couldn't believe it and so I think that's a huge part of it is like I mean so many of these things are if you if you don't have the community's trust then then people don't want to evangelize if it feels like it's not working and people don't want to evangelize and and it's

like that I think that that set of changes culturally from the top and so you know credit to the prior board and Vitalik and I and everybody sort of like saying hey we got to make a change here yeah I think it was pretty dramatic and it's like palpable on the It's very clear that the change worked. Yeah. Right. It's very clear that everyone feels the vibe shift. Huge.

I'd say the beginning of this year, you know, if you remember, like beginning of this year, Solana is about to hit $300. Trump is launching his meme coin on Solana. Solana basically felt like it had the mandate of heaven, you know, is that like Solana's going to win, it's NASDAQ on the blockchain, blah, blah, blah, you know, super high performance. And Ethereum largely was considered to be, you know, having its kind of, you know, sort of death gasps as it was just slowly bleeding. And this was what contributed to a lot of that, that anger and frustration from the Ethereum community is like, what are we doing? We're just kind of watching

our community just fall into the ocean as people go into base and they defect to Solana and Ethereum Mainnet is not getting any love. And there's no ambition in the community. And it feels like now I can barely remember that ever happened, right? It feels like now, Ethereum has the mandate of heaven again. It feels like all the action of, you know, stable coins and Wall Street coming on chain and, you know, regulation and BlackRock being bullish on the space, it's happening on Ethereum. And the Defi story, the resurgence of Defi and even having like, you know, Project Crypto from the SEC being like, yes, defy, self-custody, all of it is great. Like they're, they're kind of implicitly gesturing at Ethereum. Because, of course, that's where a lot of the assets

that they're mentioning already live. So it's not to say that it's Ethereum to the exclusion of everything else. But Ethereum very clearly is in the spotlight and the center stage. The price has reflected that. And the question now is like, okay, we have, you know, Ethereum has this moment that is captured. How do you hold on to it? It's unstoppable because you may, you may mention there is some change at the Ethereum Foundation. Sure, but this entire ecosystem was waking up because we were talking about trauma and storming case. And this was not the only trial, not the only fight that was there from the Ethereum community. So people need the time to really come back to talk openly

because they were having those battles of their own. Like you've seen consensus, you've seen Coinbase, you've seen Uniswap, all of them involved in that lack of clarity and really fighting on behalf of the entire blockchain community for delivering what we now start seeing as something widely accepted. And all the Wall Street coming and saying we've wanted to build it for a long time. So it's not a question whether you'll see any other changes at the Interim Foundation because everyone now is showing how they've been building on Ethereum and why it matters.

And institutions are coming and saying now very openly, that's why we're choosing it. We care about all of those values. It's almost like now institutions are pushing the foundation and other coordinators. to fight for privacy and permissionless access. The major asks are almost in line with the four values that we're stating over and over again. So that coordination is being hastened to deliver privacy for institutions, to deliver security solutions so we can grow, grow those numbers to, well, quadrillions of dollars because that's what decides if a global economy are.

And that's what I think keeps it going. And on the site, you have the next. new challenges of the decentralization of AI, the AI governance and all those questions, how we'll do it borderless. So this will be attracting a lot of thought leaders, a lot of researchers together around this Ethereum communities that now is research in all the cities. Recently I've seen Itcheron London coming back to one big gathering again. We've seen here in Ethereum SF, the celebration of 10 years of Itterium. It was showing how many of these communities around the world. It was like hundreds of cities coming together and seeing

Instead of focusing on the last 10 years, they focus on the next 10 years. People are excited to build more and more. And as a developers, there are fingers, artists, these are lawyers, these are financiers. Everybody just thinks about what we're building next. Tom, what's your take on the Durham Resurgence? Yeah, I mean, I think my perception, frankly, is like part of this is like, it's kind of you can't solve the problem without naming it. And I think the problem, my perception with old EF was like not naming the fact that like the killer app is finance, right?

I think it was always dancing around what like what is the world computer for? It's for finance. And finance can take many different forms. It can be prediction markets. It can be stable coins. It can be dexes, whatever. But like that is ultimately, I think, the killer app. And now it feels like we're naming it.

We're putting our finger on it and like leaning into all those like great components. It's a great use case. And it's a killer app. And like, I don't think there's anything. I think it never should have been anything like stopping. I think the EF's like meaning into that. I think maybe my question is like what do you think like I think the other other part was like what role the EF is supposed to play, right?

Like is it supposed to be? I think to your point around January, a lot of people point to like Salon Foundation. They're like great. It's like almost Silicon Valley like it's top down. It's like authoritative. It's a single sort of consolidated product roadmap or vision. And the EF is much more disparate. right. It's more Linux-y, which is kind of a pro and a con. How do you think about the EF and

like what is inbound, what is out-of-bounds? What do you think has maybe changed in those different areas? It's like specifically what is different about the EF self-conception since the change in the administration. Well, I think what changes that now we very openly say that we can try to be the most vocal and the best version of ourselves. So you look at the foundation, you have, have a treasury of the foundation and you have the group of fantastic researchers, coordinators, engineers, all of them that can look at what needs attention, what needs coordination, what needs some more effort. And usually it is a public goods project, coordination between competing potential partners, right? So saying that's whether it's interoperability, whereas U.S. concerns, what it's looking at the protocol direction,

that you will have parties that are, they're extremely valuable for the entire ecosystem pushing things forward, but they have trouble to reach out to each other. And the foundation can go to all of this, all of the situations and help to connect and fill the gaps where there's no funding because there are, well, the public goods problems.

This will be super active and what is very important is that will be very open about it and I'll be trying to do it the best way possible instead of just trying to avoid influencing, providing the impact at a places where it may matter. So we try to be everywhere and be more open to collaborations instead of avoiding those collaborations because avoiding feeling being associated with builders.

Maybe one change that I hope is visible now is in the past very often the foundation of saying that our role is to continuously only support the small players in the market to grow. But when you think about new atrology, you want to really reward the winners. And it doesn't really affect the centralization because this centralization is built into the

protocol. The roles of the game really support the new entrance, permissionless entrance of the new players. And they should see the examples that I can grow to whatever size I want on Ethereum. And removing that fear

that the winners of Ethereum that you support and somehow the protocol would fail in supporting the centralization, that should not be the case. Yeah. Yeah, that's actually a very good call out because I do think, you know, when I imagine, you know,

exactly one year ago, what was the EF doing or tweeting about? The answer was like probably some random, tiny little nothing that was like not the main story of what was happening on Ethereum. And this fixation with like, you know, watering saplings and showing them off for the rest of the class.

It's like there's some role for that. But that's clearly not what the Ethereum Foundation, which is stewarding, this massive and extremely important protocol, that clearly should not be its primary responsibility. And I think, so here's one thing that I fear that I'm going to get a non-answer from you, but I'm going to ask it anyway, is the one thing that the Ethereum Foundation has never talked about is the ETH price. And I also feel like it's obvious to everybody except the Ethereum Foundation that the ETH price really matters. and actually is part in some way of what the Ethereum Foundation's stewardship should be responsive to. And the Ethereum Foundation has always thought about the,

and is explicitly described, all of the constituents of Ethereum. And the constituents include developers, validators, users of the protocol, and ETH holders. And I feel like the way that the Ethereum Foundation cognize this sort of bubble map is that the developers are really big, The people at the foundation were really, really big.

The validators were pretty big. And eth holders were pretty small in terms of their voice and their ability to actually influence the overall direction of Ethereum. And it feels like that was a lot of what the revolt was about. Was about the Heath holders making their voice really, really heard in a way that was not reflecting what other people in the ecosystem were saying. And that is sort of part of the unspoken shift in the Ethereum Foundation. that I don't know if you perceive that or if maybe that's something that you would dispute. But that's what it looks like from my perspective.

We understand the role of the economic security and we understand that the our greatest impact is that the HRM is globally accepted for the global economy and that economic security has to support the global economy. And I think this means that everyone feels that they're talking about the same aspect of the, if is there embedded natively into the growing defy ecosystem. And I think the realization that this is one of the most important aspect of how it's built is coming to everyone. And for the foundation, we have very specific goals and responsibilities

that we set for ourselves, the impact for values. But if we do it right, that very naturally, the entire ecosystem produces hundreds or thousands of the institutions, companies, individuals that contribute to the ecosystem

and that you're showcasing all the treasury companies and so on, so on. So then we know what we have to worry about and where we

don't have to be negative at all or over the alarm. We have to provide the guidance. What can be the risk in the future? You know,

the treasury companies, like we want to see the auditing, the explanation, of Defi Product. Also, the L2s, we want to show the guidance from what are collaborations with L2BET or maybe in the future other providers of this auditing services. Want to clarify everything because we understand it very well because we hired top researchers

and top coordinators to help with this. But yeah, coming back, I think it just creates this very positive mode around everything on the interim. Fair enough. I mean, even this of like, you know, you sitting side by side with a virtual as he's talking about this, you know, financialized ETH vehicle feels like something I cannot imagine the EF doing a year ago. Oh, there's no way.

Yeah. Yeah. I mean, this conversation in general would not have been. Yeah, yeah, yeah, exactly, exactly. Coping vigilantism works. It's pretty remarkable. Yeah. It's like it's pretty amazing.

I mean, I still, I feel you talked about all the changes. I think just haven't worked with a lot of startups and CEOs and founders and stuff, like organizational change is it's a cultural phenomenon. It feels like the culture changed. It was like this catalyzing moment or the culture change. And then downstream with that and everything else takes care of itself. But yeah, I mean, credit to Fatalik and Aya and Co for realizing that needed to happen and actually doing something about it. And credit to Tamash and the team for actually making it happen.

It's not easy. I agree. I agree. But I'm very compelled by this idea that I think I've described in the show before, which is that very often there's like sort of these hidden wells of power that only really appear in times of crisis. So it's kind of like, you know, if you think of this trust, who was very briefly the prime minister of the UK, and basically she was like, you know what, I'm going to drop taxes.

And the bondholders immediately revolted. UK bonds started plummeting. And basically she was fired like the next day. And they undid all the laws that apparently she was passing. And it's sort of not apparent that actually it's not the voters and it's not, you know, the prime minister, actually runs the UK, it's actually the bondholders who run the UK. But it's only apparent in, like, the deepest moment of crisis, right? And the analogy that I think I've said previously

on the show is that, like, ostensibly, it looks like, you know, the, the, the EF runs it, or maybe the core devs run it, or maybe Vitalik runs it. But then only in the deepest moment in crisis, you realize, like, oh, no, all of the punters who own Eith, they actually run Ethereum. But they only run Ethereum at the moment when their voice is heard the loudest, which is when, you know, things are going off the rails and like there's been this spiritual um you know sort of divide yeah i think once again it was so many more voices there were the builders and developers of i'm sure i'm sure i'm sure it's a very deep simplicate we were told that there are no developers on uterium anymore but uh they they showed up right they showed up immunity the crisis happened and you had accelerators developers coming and building

and now we talk more about applications as well and we were told that defy is in crisis and defy is now just flourishing again i think through those interactions hybrid solutions, DFI will be really shining. So what do you attribute, like, okay, let me ask you,

what percentage of this change do you attribute to the price? To, I have, you had to give me a number. It's really, it's really hard

to find a causality. All right. With that, we will conclude, thank you so much, Tobash, for coming on and taking our bullshit questions.

Thank you, Rachel, for going on again. That's it for this week. We're back next week. Thank you, everybody. Thank you.