The Daily Gwei Drive Thru #2 with Anthony Sassano and Eric Conner | ETF chat, Restaking, DeFi & more

Transcript

hello everyone and welcome to another episode of The Daily grade drive through I'm your host Anthony sassano and I'm here today with Eric Connor to walk you through everything that happened in the ethereum ecosystem over the last two weeks hey Eric how you going Anthony nice to be back thanks for having me back yeah for sure for sure as we said we're not going to rug this time right we're going to make this a regular thing we've got two which I think is we're in non-rug territory but yeah I think we're gonna try to do every two weeks ish summer is a little tricky you would travel and stuff but that's that's the goal at least yeah yeah exactly um well yeah I mean we can get straight into it I think the biggest stuff that happened I mean I think it's been like maybe three weeks since we did the last

the last podcast was all this talk about like these ETFs right these kind of like Bitcoin ETFs that are that are kind of coming on the radar again and all these big institutions like BlackRock and Fidelity uh issuing um applications for ETFs and we've seen this this before you know plenty of times before obviously it was a main narrative during the last bull market but none of them ever got approved and I'm talking spot etfc are the Futures and and kind of ETFs that get approved uh because they're separate products they're basically derivative products um whereas the spot ETFs just haven't and because of this we saw the consequence of everyone piling into things like grayscale gbtc and and efe which are inferior products because they're basically a one-way Bridge you there is no way to redeem so they traded

a discount um pretty pretty uh pretty often and I think they went as deep as a 40 discount I believe gbtc and because of this it was nicknamed the Widowmaker trade uh because there's a lot of funds that actually piled into this thing and if you actually Trace back why all the funds and and things blew up like they did in 2022 it can actually be traced back to gbtc so really if the SEC had just approved one of these spot ETFs uh we probably would never have gotten such a inferior product that the SEC approved by the way which is just weird to me um that led to a lot of the blow-ups in crypto now I'm not saying it's the only reason but it was definitely a big reason but that's just some context for people listening in that may not know about that but yeah I guess like what's

your general take on this ETF stuff like is it is it different this time around like obviously BlackRock is a lot bigger than well he's the biggest player in in the tradify space right um so obviously they're put them putting their weight behind this is is pretty big but the timing is also pretty interesting as well because it came uh basically a few days after the SEC sued coinbase and binance so yeah just because I know obviously you've been in the Trad fire world for people who know who know you um you're in the tradify world like how how big is this like is it actually something that's different like is this time different or are we just going to see everything get rejected again I think it's actually different and this is funny because we if people list were into The Ether listeners like we talked

about ETF so many times and I think I I want to say I said it was like four or five years away and this was actually like 18 right right so we're there right we're within that window I really do think this time it's different and I you mentioned it like the timing's interesting and I think that's the biggest takeaway here I think this is a little bit of a signal from these institutions right where they're kind of saying to these politicians hey back off a little bit right like we see money to be made here we want to get involved in crypto you shouldn't have all the power to like say that crypto can't be a thing in the US right so I I think it's very intentional that BlackRock came out within a week after the coinbase and binance being sued by SEC news and say

hey we want to do an ETF and then Fidelity follows like all the big players are coming out and I think one of the things you really have to realize about U.S politics and politics everywhere but especially U.S politics is these guys are kind of the Puppet Masters right not like a conspiracy theory way but they're paying the bills like if you go look at like the BlackRock CEO Fidelity Co like follow the trails of donation money like these guys get things through I think I saw that blackrock's historical record of ETF approvals is like 490 and one or something like that so like as games are gonna step in the way here I I don't think so I think this is it and then to see the fight Fidelity follow up um you know people want to say like when's the ETF I if you're an

institution go with the brand first right it makes sense to me like we might disagree that Bitcoin should have the number one brand but like it does right now um and it's the easiest one to kind of get through they don't want to like throw Ethan there and some other alts and confuse things so I think if this does get approved um we'll quickly see an eth follow um but I think it's time I really do the Market's mature enough we're seeing 2x future ETFs of Bitcoin be approved like it's the spot ETF gets uh disapproved twice with Fidelity and blackrocks like something really shadies up um but I I think it's time yeah yeah definitely and and I mean just as you said like there's that signal

being sent right now and I think that the the market kind of reacted obviously positively to this but then it came out yesterday that sailor bought like another two three hundred million dollars worth of BTC which at around 28 000 which could also explain the you know the pump so it's kind of hard to know what what what the the short-term movements are based on obviously it was a BTC LED rally because the BTC ratio went down and a lot of the other coins didn't really do much so people pointed oh yeah you know this is BTC rallying ahead of the ETF approval it's like yes and no I think that the ATF applications uh you know uh are kind of like they're positive but they're not bringing you money yet right even from non kind of like uh ETF money basically people

buying BTC just on coinbase or whatever so really you have the same money sloshing around and and you could argue that that the biggest new money coming in is probably just sailor selling microstrategy stock you know and then using that money to to buy BTC but other than that I'm not seeing much of of any new money coming in right now and I think that's what people don't get is that the price can probably retrace its entire pump before you know back down to the the price it was um at the time of these ETF applications but that has no bearing on if the ETFs are bullish or or bearish uh it just what what it signals is that there's there's just the same amount of money sloshing around it's just Traders trying to make some money off the volatility and eventually that will change and eventually we'll have a

proper change where it becomes a bull market instead of a bear Market or a crab market I guess what we're in right now um but that's I think what a lot of people kind of Miss there and you mentioned that in ETF would probably come after a BTC one I mean I I definitely think so and the funny thing about an E3 ETF or just like institutionalized eat products generally is that staking actually has a big part to play here because I think that either as an asset is just much more attractive to uh I guess like the trade fire investors because of that yield you can get even though the yield obviously keeps going lower because more people are staking it's still quite a quite a healthy yield and obviously in the bull market when activity ramps up again there will be more rewards like fee

rewards and Mev rewards and stuff like that as well so I think that's going to be very attractive uh to people but in terms of like other things getting atfs is probably going to be like not this cycle maybe next cycle there might be some standouts but the problem is is that like with a lot of these things and and the way tradify looks at it they need regulatory Clarity and really only BTC has that today eth is in this limbo where the SSC still maintains that it's a security but this aftc says it's a commodity obviously we both believe that it is not a security and I think that generally it's it's probably not ever going to be labeled officially a security I don't think the SEC is actually going to try and go after eth but it does scare away players right stuff around these tread for

institutions but I think ironically what could happen is that they might file for either ETFs and then if those get approved if the SSC approves those it's basically them saying well you you know this isn't a security because as far as I know the way it works is that you can't approve an ETF for an unregistered security that would just be uh really silly for the SEC to do um and yeah as I said like the other ones the other kind of tokens out there very hard for for them I think and you put out a tweet actually that I wanted to talk about this was a little while ago maybe a few days ago or something where you basically said that you think this could potentially be like an eat BTC lead bull run where a lot of the other coins basically lag and we don't

get a repeat of what happened in 2021 and maybe even 2017. um I I kind of have a little bit of a different view on that but maybe you want to expand on on that view and why you think that it could just be Ethan BTC and a lot of these other things will lag yeah so I think it circles back a little bit going back to your point of why haven't we seen the rally yet like if we think the ETF is going to be approved why haven't we really seen that in the charts um I a lot of that's going to come after the fact right which is kind of what you were saying like everyone's talked about ETFs at this point if you're in crypto now you've probably found a way to get crypto people that want an ETF they want to

like open their Fidelity account their e-trade account whatever their brokerage account and just like type BTC into their ticker box to buy and it's there right like the ETFs there if you go look at like the gold chart um once an ETA a gold ETF got approved I think it shut up from like 400 to like 2 000 or something like that right it's never been back to that price before so if you look at like BTC or eth let's take btc's whatever the high is 70 000 or something like that I can't quite remember somewhere around there um say at four exits from there it never goes back to 70 000 but that's because people now have access to it they want to buy it they're either in their 401K with their broker whatever like they don't want to go on coinbase and buy

they you know I don't blame them they might feel like it's a little shady or it's like the media makes them feel like that right so I don't think an ETF rally will happen until after the ETF and we see that a lot right in general with like e-staking remember phase zero like the bullet Market happened after that hit and went live right so I really think the ETF rally will be after that and so kind of going back to my tweet a little bit I don't think like it'll be as in no halt will rally but I do think if we really because the last the meme in the last bull market was institutionalized money right well if we're talking like real money coming in like and it's not real money as in like one big player

talk about millions and millions of people want access to this stuff again in their 401k or brokerage that adds up very quickly and we haven't seen that influx of money yet and if those rally that those big inflows are going to be coming from ETF approved or like kind of stamp of approval coins and like trust me I don't like this I don't I don't think like a government should be able to just say hey we think PTC is great so we're going to get an ETF we're going to give a stamp approval Fidelity can trade it blah blah I don't like this but it is sometimes you got to just take the reality of the market right and I think the flows will come in there now of course as people make money there they get involved in crypto they might go chase Alps

um that will always happen but I I think maybe for the first time I think ever we might see like a dive in the the ratios between like a BTC and Ethan all rally right like they might actually rally a little stronger than all I mean last cycle was crazy with the all layer ones and all this stuff going up exponentially um and kind of outpacing BTC and Ethan of course ethos out outpaced BTC for a while now but um I I think every Market's a little different I I just think there's going to be a hint of that um as kind of what I'm trying to say yeah and I think it really depends on who the kind of marginal buyer of crypto is right like if the the marginal buyer

if most of the inflows is coming from like the ETFs and the Trad five institutions then they're definitely not going down the risk of right they're going b2c and probably eighth as well and they're gonna kind of stop there it's really the these kind of like old rallies that we see are really kind of a retail Trader driven phenomenon and then we have some crypto native funds and stuff going winning as well and we obviously see how that ended in 2022 where everything blew up but my opinion I think I mean I agree mostly with you but my opinion differs a little bit wherein that I don't know if this cycle will be the one where the institutions outweigh the retail um I still think that retail is going to have a definite big presence during the next bull market I think that they're

still going to have plenty of access to things I mean coinbase and binance are still there they haven't listed these assets that the SEC claims the Securities I know other platforms have but they're all these Trad fire platforms that added crypto just to be part of I guess like the the flavor of the month basically back in 2021 and they've listed these things but I think that you know coinbase is going to be pushing people to their new base L2 as well and that's going to get a lot of people just playing around with different tokens and things like that so I definitely do think we're going to see those those rallies still happen but we all know what happens when the liquidity kind of dries up and we go into a bear Market again everything just absolutely nukes against BTC like there is very

rarely a token that will actually outperform BTC in eight over over the long term I think I can think of maybe one that's outperformed eighth over the long term and that's rocker pull uh the RPL token that's been out since 2017. um but that's one out of how many of these things have we seen come and go over the years right so when it comes to these realities yeah they can they can happen I think in Bull markets because of that retail participation but yes it's going to be the same story still where if you're stuck holding these things you know one to two years after the bull market there is more likely than not you're never making your money back in uh probably USD but also against Ethan BTC and especially if we have that more traditional Finance kind of uh type person involved with crypto just buying

BTC and eth indiscriminately basically through these ETFs then yeah it's definitely going to going to be a win change there but I do think that retail participation in crypto is still going to be very very strong uh people go down the risk curve as you said they make money in BTC and Ethan they go down the risk curve but I also think that a lot of people especially in like the peak bull market like 36 months or the the last three to six months of a bull market the marginal buyer is clueless people right they're just people who have come in Via watching crypto on YouTube or hearing about it on mainstream media and they're like oh wow what do I buy and then a YouTuber tells them to buy this coin because it's going to some ridiculous price and they buy it right and then the the players have been

around for a while will trade around this obviously Chase The Palms look at the charts basically do Ta on this or whatever um but that's why you see most of these things underperformed because most of them are generally not supposed to be worth anything um because they just just crap they're part of crap projects uh and their projects are like a lot of the time the projects are dead all right and their tokens are still worth something for some reason but that's just that's just crypto but yeah EOS popped all the way back to its previous cycle high like at the very end like the last month of the ball cycle exactly exactly and that was only against USD against Ethan BTC it definitely didn't get close and I think that signaled though during a bull market where if you when you start seeing these things that are so

obviously dead popping back off it means that the liquidity is very close to running out it means that everyone is going down and just seeing what hasn't pumped yet because you're like oh this hasn't pumped yet it means we've got to play onto this to pump it and that is usually from my experience over the last two bull markets that I've been part of I know you've been a part of of three of them actually technically I've been a part of three of them but you you kind of stuck around in the 2014 bear Market but that is basically the the clearest signal ever is when people are just going down the risk curve to Absolute crap and it's pumping it's time to get out right exactly so it's an interesting topic right because you said and I totally agree like retail will always be

there and probably as a combined entity outweigh institution so a question would be I'm curious your thoughts on this do you think retail has Chase [ __ ] coins let's put it that way whatever you want to call them in the past because they log in they hear about Ethan BTC and they're presented with all these things on these exchanges because they can't buy them in their brokerage accounts or their normal Investments accounts do you think potentially because they would have access to like a Bitcoin ETF and ETF in their normal accounts that they won't go to you know coinbase Finance to buy um like you know what I mean like do they go there and they're like it's like a candy store and they're like oh I should buy eight of these you know

instead of just the core two that I really like that that'll be the most interesting I think dynamic as we approach this I think so and I mean I everyone has their own anecdotal experiences uh with their real life friends and family who talk to them about crypto and then you wonder how they even heard of this coin right sometimes they'll mention a coin to you and you'd be like what I've never heard of that before so I think you're right there is definitely a huge element of people going to these exchanges and seeing this candy store and just buying whatever looks good A lot of the time it's whatever's cheap and cheap being the coin price not the market cap exactly um yeah that's that's the number one oh this is the cheapest if it goes to the Bitcoin price I'll be a gazillionaire yeah yeah exactly so there

is a huge element of that but I think that the mainstream media and just media in general and crypto media like crypto YouTubers they play a huge part for sure in a lot of this stuff because during a bull market they get a lot of viewers um you know some of these guys they get hundreds of thousands if not millions of views on their videos and these videos basically will highlight one coin or a bunch of coins and run through the ball case for them which is usually just The Narrative of the month for each of these things and then they'll say this is going to this price and you know basically here's where you can buy it and here's my referral link so maybe because of that Dynamic where these exchanges don't have these coins on them it will be harder for people to buy them

but as I said coinbase is launching their own L2 which will have all of the coins on there all of the the tokens at least not the probably not the coins but you know the tokens right the um the rc20 tokens and Ethan stuff like that so people coinbase will obviously say Hey you know we don't have this thing here but you can go buy it on base and coinbase obviously still benefits from that from people going to base it's like or binance did with BSC so it's just basically the coinbase's version of BSC so I think that that Dynamic is still going to exist because of that but it'll be yeah it'll be definitely curious to see how muted it is compared to the last cycle because there maybe isn't that candy store because we all know that that a lot of the things that pump in

Bull markets are new things right the old things you know they're old they're Boomer we don't care about them and there's new flashy coins on the market but if those things aren't getting added to centralized exchanges because of regulations or whatever other reason will they actually pump as much and I think the argument as you said to be made is they probably won't especially if they're not easily accessible on base because they're a coin of another L1 or another blockchain where you you know you have to bridge it across the trade and people aren't really going to do that so I think that uh there is definitely going to be a big element of that and maybe The Optimist in me thinks that we won't see another alt L1 season because I'm so sick of these other l-1s and these ethereum killers getting attention and making everything so noisy

when you and I both know and a lot of people that have been in ethereum for a while know that that pretty much all of them are going to uh be useless right no one's going to be using them after the bull market and they're going to fade into a relevancy so yeah it's going to be curious to see how that all plays out for sure yeah no definitely I mean I think people think oh I had this coin like it's going to pump this next cycle like you should go check some old charts right look at the EOS chart look at all these charts and I think I don't know what happened last psycho I think a lot of it had to do with like SPF and FTX and pumping some of these alt later two narratives right but you always get a new narrative in the new

cycle right so I I think personally it's going to be around the ETFs and you know these kind of like regulatory approved coins but I mean we're seeing like one of the most interesting things as an American that I'm seeing is all of a sudden China has totally pivoted right um we're seeing Hong Kong be totally open to crypto like overnight it's like oh you can buy Bitcoin you can there's ETFs like you can do everything with it I mean that clearly seems like you know some kind of political move um and I don't think it's a coincidence right that a few days later you saw these ETFs applied for in the US right and I think there's some pushback probably to I mean it's all politics right America is such 50 50 divided if

someone takes this stance you have to take this stance right so now all of a sudden crypto has become this like Battleground but I do think you know China when it comes to the US right there whatever you want to call them I guess you call them enemies I don't know what the proper term is but definitely political opponents that's probably the right way um but I actually do think China taking like this stance to Pro crypto all of a sudden will actually help when it comes to American regulations yeah definitely and and I actually like that it's become such an issue in American politics because like even though it's so divided it means that we don't just have like uh the Democrats attacking crypto right and saying it's all crap and trying to destroy it we actually have another side

that's fighting for it and I think that it I I know it's kind of annoying for Americans because depending on their politics they may not side with like Republicans on on things but the crypto thing is like a big thing for them right you may and that it's so weird that like Democrats are against crypto uh when they're supposed to be Progressive I don't I don't know the the ins and outs of American politics that well but from the outside looking in it does strike me as a bit weird but then I look deeper and I'm like Democrats like the banks they say they don't but they definitely do um so I don't know I like personally I don't consider myself like a one issue voter I probably wouldn't vote just based on the crypto issue but that's again why I like it's a Battleground

thing because if the Republicans can push the Democrats to be friendlier then it means that people in crypto don't have to be one-issue voters because I think that that's probably the worst outcome for Americans is that they're just forced to vote for someone that they otherwise just didn't want to vote for at all just because of that one issue that obviously affects them quite deeply uh so we'll have to see how that plays out but yeah the China stuff's interesting um Europe as well is being very friendly uh southeast Asia generally is pretty friendly um India I think is warming up to it but it you know I think during the bear market and the crab market you just see more regulatory stuff than the bull market because in the bull market everyone's having fun you know no one wants to regulate it coming in in the bull market and

spoiling the fun right I'm ruining the party whereas they the regulator's like okay we'll wait till the party's ruined we'll wait till the party's over um you know they'll ruin it themselves and then we'll come in and start doing some stuff but I tweeted the other week that I think the regulatory kind of bottom is in to be honest I don't really see any more kind of like harsh things coming down the pipeline I think the SEC is pretty stretched in at this point in terms of who they're going after and the battles that they're fighting but hopefully I'm not wrong on that hopefully we don't wake up next week to sec's for some reason um you know battling and going after eth or something which is an interesting discussion in of itself because I've had this discussion with people before who would the SEC even go after right like

the closest company to like eth is an asset in ethereum as a thing in the US is consensus but consensus didn't issue eth it didn't it wasn't even around at the time of the Ico it was formed after it it doesn't control ethereum so who would they go after vitalik he's not a U.S citizen right um there are some co-founders that are but going after someone personally is is not usually something that the SEC will do and that's not how they they win so in my mind the SEC can't go after anyone right they accept the exchanges trading these things and this is something people missed is that the SEC is not going after like polygon or Solana or cardano in their lawsuits they're going after coinbase and binance for trading these things that they claim are

unregistered Securities so for them to actually go after the issuing company is quite difficult and a lot of the times they do it um and and it's an American company or some something based in the US but if it's not in the US it's very hard for them to actually go after the company that issued it and in ethereum's case it was a foundation was the ethereum foundation which for memories based in Switzerland right or based out of Switzerland so it has nothing to do with the US um but but yeah it'll be interesting to see if they ever did go after each which I think they won't but if they did like who would they actually go after right yeah you know I guess all of us validating or something they're going to chase 200 or whatever what are we up to 600 000 people or something validating

on the ethereum network no I mean it's a good point I think people miss that like it's not necessarily that because they're saying a certain coin in the lawsuit is non-registered security like they're just trying to go after these exchanges for whatever reason power play but if you really break it down right like they probably got buddies at Banks and brokerage firms that are saying hey we want a piece of this pie like you know if you have started to think about this it's like they're going after these small exchanges and all of a sudden BlackRock and Fidelity are like okay we want an ETF like come on there's definitely some you know like some padding on the back happening here um I think we can all kind of see through the lines but no I mean it's interesting actually a topic I kind of

wanted to transition to a little bit because last time we talked on here what was it three weeks ago or something like that we weren't too far away from withdrawals being enabled we were talking like about the Q and stuff and I mean we're just kind of exponentially going up on these Stakes I think if you go back to some of our original Into The Ether episodes talking about how much we think would be staked I was saying around 10 to 20 million Max and I think we just broke through that 20 million each state um a couple days ago I think we're like 20.3 million or something like that last I looked um and it doesn't seem to be slowing down I mean the deposit queue is at 40 days 30 40 days the execute's at zero

you can basically get out at any time um and yield I think yield like if I had to average I'm running Mev boost I think I'm about like six percent or something six to seven percent something in that range um but if you don't and you're just taking on Rocket pool Lido and exchange I think you're like three and a half to four percent I'm curious like like where do we think this will stop like at what point maybe this just keeps going I know there's a point in the protocol where like it starts to deter more stake but I think it's up at like 60 70 80 million I don't want to be quoted on that because I haven't really looked at that in a while um where the rewards start going down a little bit faster um but I mean are we going to see this

just like driven down to two three percent and see you know 40 50 million East Stakes or do we think this is kind of like a level where this levels out I I don't know what to think like I think bull market will change this a little bit like if we run up to 10 15 20K at some point like people will probably withdraw some and and sell um but it seems like like there's no stop in this wagon right now yeah I mean there are a lot of different kind of things I think that go into it I mean on the APL the yield front what people do and I've noticed they do they take like a daily or weekly API and they extrapolate that out to like the yeah which doesn't really make much sense considering that gas phase and like Mev payments play a big part in this and

obviously those things are going to be higher when activity is higher and that will affect the yield and the yield is affected by a lot of different things but that's the execution layer rewards and then you've got the consensus layer rewards which obviously go up if uh less people stake um you know people withdraw it'll go up it'll go down if more people stake per validator um so I think that the APR you you kind of have to wait you might you may be able to take like a month API and extrapolate that out but still it's kind of hard and different services will give you different APR as well depending on a multitude of different factors right the the effectiveness the fee that they take if they're paying out token rewards uh rocketpool actually pays out RPL token rewards to two stakers as well so there

are a number of different things that factor into yield but I think generally it's kind of hard to know where it's going to stop because there is another big factor that plays into this which is restaking from something like eigenlayer where essentially if let's just say the vanilla eatstaking yield goes to like one percent right it's like really really low or something but you can get another three percent on eigenlayer if you restake your eth so effectively yes you're adding more risk yes you're not just an ethereum Staker anymore you're also an eigenlayer restaker but effectively you would be getting like four percent right four percent each denominated yield instead of the one percent so there's been a blog post actually about this put out by some uh by someone called Data always people can look that up but effectively what it argues is that there's going to be so

much e-stake simply because that even though the vanilla steak yield is low because of these lsts you can actually restake it with eigenlayer or you could go put it on like a money market and draw against it and do whatever with it even though the yield is is quite low there so that's I think the thing that I'm paying the most attention to is if that's actually going to happen like are we going to run it up to like 60 70 million each stake even though it might makes no sense for it to be that high considering that the vanilla yield is quite low at that point or do we kind of stop out somewhere and and kind of like Peter out somewhere and it just levels out at maybe three percent or something vanilla steak and then you get like another three percent for eigen layer

but you know if you if you if you're approaching six percent either nominated yield that's that's going to encourage more more people to stake right that's a huge yield that's and and people forget that that's eighth denominator that is not dollar denominated yield so if eath goes up you are earning even more against the dollar because you've earned ether Awards which are now worth more um and obviously tax is playing to this as well which is another thing that gets thrown into it so I think that trying to reason about this is very hard because there are a lot of assumptions you have to make and there are a lot of moving parts to it but generally I think that e-stacking is going to be up only for a while that's that's the conclusion that I've I've been at for a while is that I

don't expect inflows of Ethan to staking to slow down anytime soon but in terms of where that each state goes is going to be interesting I think a lot of it is definitely going to go into lsts for sure because it's just a no-brainer for people to do that because they want to be able to restake or they want to be able to put that into money markets restarting will be possible with for solar validators as well but it'll come out at a later date so it'll be interesting to see how how the share um happens there but then there are other Stadium providers coming online as well that are doing things a little bit differently um and then they're going to be institutionalized staking products which probably won't have an LST attached to it but it it begs to the question of like okay are these institutions going

to work with existing providers like are they going to become like a Lido nerd operator or a rocker pool node operator or are they going to do it in-house I feel like regulatory wise they're going to have to do it in-house and cut and and have custody over the the funds themselves but or like with a registered third party but that's all again open questions so I think yeah when thinking about this it's very hard because you you just keep going down different rabbit holes and and you come to different conclusions based on different assumptions yeah I mean even when we were talking about this a few years ago like we didn't think about the concept of restaking right I mean we were barely even thinking about the idea of liquid staking derivatives then so I do think like like you were just saying giving me

solar solo stickers the ability to get involved in some of this stuff will be important right from like an ethereum Community protocol development layer right like if not everyone's gonna rush to lsds right and like be involved in that because it's easier they're wrapped you can do whatever you want with it put it in lending protocols I mean this is one of the things right like I think the new compound V3 yeah V3 um you could take like your state eth Lido eth or whatever like Ave and use it as collateral right to borrow against now this is like or I think they have Lido do they have um rocket police on one of them I think one of them has Rocco police I think yeah they're slowly in the process of adding them all um it's obviously about

liquidity and stuff like that right yeah exactly but like as a solo stick you're like okay well this I'm kind of just like soil sticking I [ __ ] me I guess sorry I can't like don't do anything um so like it is when people are like why are so why is so much money going into liquid staking derivatives and not into solo sticking like this is something to consider right not only can you earn additional yield you can borrow against it you can use it in defy um so these are all things to consider like if we want solos taking two floors to get bigger um these are things we need to think about and improve upon right um so yeah I mean I I it does seem like it's just going to keep going up and when we're talking about this like three

four years ago right we weren't even thinking about like these derivatives that would happen right we were just saying oh we're thinking pure yield and like you couldn't do anything with it we I mean we probably should have talked more about like the idea of being liquid but we weren't um so it's just totally opened up this new gate right and and I think the most interesting thing is I would I would think most of these people staking this 20 million each probably aren't short-term concerned about price action right so you've got what a sixth of all yeast Supply kind of quote unquote locked up not really locked up but people probably not really thinking of selling I mean if you really start breaking it down not many people control controls the wrong word like on a

day-to-day basis control the price of eth like there's just a little bit of Ethan exchange and being traded um that actually controls it but yeah I mean as a solo Staker myself I hope people stop staking because I don't like my yield being ripped into but I will say one cool thing of being a slow sticker that you don't get um of being like on an LSD is random block reward so I've had some pretty sweet random I mean I'll get a Blog that's like .01 and I've had some well over one eth just completely random come in um over the last few weeks so I mean yeah the bull market I agree we're quoting four five six percent right now I mean it could get pretty wild in a bull market

um one thing I've been thinking of recently and I'm curious to get your thoughts on this what what do you think is going to drive like on-chain activity in the in the next Bowl so two cycles ago well let's call it one and a half Cycles ago we had defy we had nfts um what are your thoughts around you think those are going to be revived there's always something right that like clogs the chain and besides just price and speculation what are you kind of seeing or thinking um as far as that goes in the next cycle it's going to be a different cycle I think because of the l2s right like we're pushing everyone off L1 to l2s and obviously l2s take up block space with uh you know with their proofs and data and things like that and the bridging

and all that sorts of stuff but with erp4844 going live uh probably by the end of this year that's going to dramatically lower those costs for data which means l2s are going to go pretty back to you know a pretty small portion of the overall block space usage I think they're at like five to ten percent now so it's not huge but that could drop to like one percent or below um and then you know it depends like who's still on L1 once we push everyone to L2 it's going to be the whales right like the the whales the people who aren't fee sensitive uh they're going to be on L1 so I still think that the stuff that has driven the activity uh in previous bull markets will will drive activity in in the new one um and why I think that is because even

if the fees are like High um and uh they're like what a hundred dollars to do a uni swap trade or like mint and T if that nft or unisob trade is worth more to you than a hundred dollars you're going to still spend that money right if you have that money to spend you're going to do it because if you can claim an airdrop and the airdrop's worth a thousand dollars and it costs you like a hundred dollars to claim and swap it you're still going to do that because that's 900 that you still get there and this is what people don't understand is that the fees are paid by people who have one have the money to pay it and two it's worth it to them to do it because they're going to have more value out of paying those fees than they were putting in and that's not

going to change just because people move to l2s I think I think L1 is still going to get pretty expensive I think there's going to be plenty of stuff happening on L2 of course as well for maybe people who one obviously can't afford the fees when they get that high because that's that's pretty ridiculous like for a lot of people right and two there's going to be a lot of stuff happening on the l2s naturally because that's where the users are that's where a lot of the new users are as well because as we've seen in previous bull markets it's the new users that drive a lot of the the fresh activity because the older users maybe they don't want to get involved with this stuff because maybe they've already made their their wealth a lot of their money and like you know what I'm not

going to go down the risk curve as much this time I'm not going to just mint these random nfts I'm not going to trade these random coins so I do think it'll be a similar thing to what we've seen before but a lot of it will probably happen at L2 uh and the and the fees on L1 will just naturally go up from from Wales and non-fee sensitive users generally uh so that that that's I think um something's going to be majorly different uh between life cycle and this cycle is that the l2s are actually live and have a lot of stuff on there and they're going to have bridges into them we do have bridges into them already from centralized exchanges and stuff like that um but in terms of the l2s as well like the fear of a new that they're going to

drive it's going to be interesting because they're not things that can provide unlimited scalability even with 4844 there is going to be a point on these l2s where they reach their own capacities that they've got set for themselves and the fees start going up because of that uh and then you know what happens then do we do we see people migrating to other l2s or to l1s again uh it's it's an interesting Dynamic to think about but yeah I think generally the activity will be driven by the same stuff we've seen before just speculative stuff around like nfts and tokens and obviously L1 ethereum is still the premier place to Mint an nft because it is um I mean the art itself isn't permanent or anything like that right because it depends on where the metadata data is stored and stuff like that but generally if you mince and uh you know

an nft on an L2 especially if it's a newer one are you sure that L2 is going to be around for a while right and then okay can you bridge it to R1 okay well what does bridging actually mean does it mean it burns the asset on L2 and gives it to you on R1 or does it is it an IOU so there are concerns around that I think for people that that collect maybe the the high-end nfts as well so generally I think those things will still be minted on L1 and then potentially bridge to L2 for ease of trading and stuff um but yeah I don't expect L1 activity to to really go down um even if we move people to L2 yeah we're finally kind of there to L2 that's an interesting topic by the way that I don't think not to fully pivot to

nfts but I don't think people realize and we kind of saw this there was like a I think it was like a Solana nft exchange or something said they were just shuttering the doors and they had been storing a lot of metadata and like these nfts just basically disappearing right I I don't think a lot of people realize that your your favorite profile picture your favorite art most likely isn't stored on chain there are some um I'll give a shout out to rip cash who's like a one-of-one artist that stores a lot of his art on chain there's a few kind of coming along that are now of course like because the data can only be so small you have to do it in like unique ways right you can just upload this like giant JPEG to the chain um punks did there technically punks are

stored on chain like the website doesn't really pull from it but you can pull up traits and like colors on chain but yeah I mean I think go into Layer Two will be a huge like we've been talking about this literally since we started podcasting which now is like five six years ago like we did we finally I think are to layer two right but what a lot of people don't realize in Bear markets I see a lot like oh why isn't this player two getting a lot of activity well the fees are cheap on layer one right so the whole point of Layer Two is once fees start ramping up on layer one people start going off to layer two but we kind of do need that seamless experience which I think we're getting there right like block explorers are finally there I know metamask like

has some like Bridge options now they have kind of like the default drop downs wall connect 2.0 just came out where I know if you like connect your wallet you're connected to like all your Wallets on all these different chains and I know a meta Masters integrated that as well so we're getting there right where it feels more seamless and we kind of have these like liquidity provider hopping systems um where you can get on and off layer twos quick um and not have to wait for the the timeouts and stuff so it'll get there um I still want to get to where users don't really care if it's on like polygon or Arboretum or optimism right they just kind of like they're agnostic to that and I think we're getting pretty close that felt far way away three years ago but yeah four projects go over there I

mean in my opinion 99 nft space should be on a layer too and I think they're trying to figure that out I mean we saw some big missteps like Doodles went to like flow and we saw some weird stuff um with going like VC chains or like bad decisions sticking on layer one when that people teams could have went to layer two and just minted there and we get gas Wars and the gas was worth more than the mints and like so these teams need to start realizing this but you know in all fairness a lot of these nft teams are kind of newer to ethereum and like the tooling and the the knowledge might not quite be there for Layer Two yet but I think we'll get there in this cycle um so I think yeah like the the bigger money trades D5 transactions probably

stick to layer one I definitely agree with that um that'll take up a lot of block space I mean even with the market being kind of quiet gas is decently High um and I think yeah I think we'll see nftes eventually like gaming type stuff um be pushed to Layer Two I don't agree yeah I think even the the growth of l2s have been has been quite impressive in the bear Market um like there's still a lot of activity happening there a lot of apps been deployed there the users there and I think as I mentioned earlier like coinbase putting out bass and and putting users there and and getting people on chain is going to be a big thing because coinbase has a lot of users who have never charged a blockchain they may have bought crypto

on coinbase and never done anything with it right and just left it there and speculated and they've never been on chain so coinbase has this perfect opportunity to basically say hey we have this chain for you to use called base and I have a feeling they're going to make certain transactions free on there such as usdc transfers um and things like that because at the end of the day the gas fees like the thing is with the gas fees is that what you're really paying for is compute at the end of that you're just paying for someone to store that that information and to run the node for you on their machine really at the end of the day um so coinbase is going to be running the only validator and sequencer for their L2 for for a while I believe or it'll start off pretty centralized so

they can just cover the costs right they can just cover those compute costs those Hardware costs and there could potentially I mean they would have to have a way to stop people from like spamming the chain obviously and then and do like a cyber resistant thing but I'm sure they can come up with ways to do that and they could potentially offer like free I guess like gas fees or like gasless transactions on a lot of different things such as usdc transfers and a few other things which is going to entice users a lot more I believe because if coinbase says hey we don't have this asset but you can trade it on base well that's going to lead a lot of people there I think because usually what would happen is that people would see an asset and it wouldn't be on coinbase and they'd be like okay where

do I buy this and they might go to binance right might go somewhere else and coinbase would lose the business because of that it's because they would they can see that right they can see the eighth getting withdrawn from coinbase and going to some other exchange or the dollar or the usdc or whatever and they would say well you know how do we keep this in-house like how do we profit from this obviously as a business well I think the way they're going to do it is is by a base which is going to be great for the entire L2 ecosystem because people aren't going to stop at base they're going to bridge to other L2 ecosystems because other L2 ecosystems will have something that bass doesn't have right for example and maybe not tokens or maybe like an nft as we were just talking about so I think overall

I'm very happy with L2 growth in the bear market and I think in the bull market it's just going to get absolutely crazy because I'm expecting base to go live maybe this year um if not early next year and that'll be before any bull market because I think a lot of people seem to think and I think this is actually the right way to think about it my God tells me it is is that the bull market will start again next year we'll just be stuck in this four year cycle that we've been stuck in for a while for crypto it just just feels like that's going to happen again um and then it won't be like the Raging Bull Market will be like the early Innings of it like what we saw with 2020 and I've speculated that we probably see a layer two summer because of that where

we get like a lot of this money coming in and people will like want to go somewhere with it and want to do stuff with it and the l2s are right there for with all this stuff people to do so and obviously base uh playing a big part in that so yeah I'm very much looking forward to seeing if that plays out yeah for sure I'm guessing the craziness around price action will eventually be the layer tubes themselves right probably getting crazy valuations way over I mean even though they're all doing great work that we're going to see you know copycats and clones and all this stuff come on people chasing price up um but yeah I mean I agree it's definitely it's time for Layer Two coinbase kind of like taking some leadership here doing their own which yeah maybe it's a little

synchronized to the start whatever you want to call it but you know a lot of the customers probably don't really care they're keeping their crypto on there anyways um and you know and kind of introducing people to this concept that you know ethereum can have a layer two with pretty much the exact same security assumptions as the layer one but you know transactive fees are a lot less so I'm excited for it yeah I I'm not going to make any predictions I guess but I I'm getting a tingling of uh bull market starting let me put it that way the the early months are always a little choppy um people think it's like oh we're just gonna go straight to you know to the moon and it's never like that at all if you go back and look at you know the last two cycles the first few months are

very up and down shaking people out volumes up and down nothing too crazy you know and then it just takes off into some Godly candles but I I would agree I mean I think the the the juice of it is going to be uh early to mid next year but I I'm I'm starting to starting to feel something a little different I'm not gonna lie on the bull market side of things yeah I mean I I would say I am as well but I think that one thing I've learned over the years is that the market needs to be convinced right and that takes time to do like to swap from like a bear Market to a bull market it needs to be convinced that like the bottoms for b2c and eat particularly are like in and they're never going back there right it

needs to wash out all the Bears it needs to basically keep wrecking them and saying hey you know you can't be bearish anymore because this is actually a bull market now and then once you flip like these big bears into Bulls um these ones that you know just stubbornly bearish I think that that's when the real bull market starts and how you flip them is like the price just goes up right you you go up and you go up to these levels that they look at on the chart and they say okay well this is a key level if we take this and we hold it then it's more likely than not the bull market is actually starting so we need to stop being bearish and now let's just pivot to being bull so I think that's what take takes time at the end of the day like even if you know like

with all your heart and you feel it and you know in your entire body that the bull market starts like now the market still needs to be convinced that it has started which as you said leads to a lot of chop leads to a lot of people being washed out but eventually we get there so I do think the rest of this year is probably just going to be us convincing the market that hey it you know the bottoms are in for b2c and eighth we're not going back there uh there's not really that many reasons to be bearish anymore there's more reasons to be bullish because of the Trad five star because of all the the building happening blah blah right whatever narrative you want to attach to it um and then usually when uh when kind of like New Year's happen people have this

thing they have this kind of theory that like the reason why pivots usually happen in in kind of like the the new year is because people always have like this thing whether it's conscious or subconscious where they're like it's a new year everything's fresh everything's awesome it's going to be great this year and then slowly during the year obviously that becomes less and less and you're like oh crap this year was [ __ ] but at the start of the year you're always like oh it's a new year blah blah right and it's just like a very human thing that we do so I think that's why you normally see pivots in the New Year like if you look on on all the crypto bull markets a lot of them have happened a lot of the craziness happened at the beginning of the year 2017 was 2017

right like that whole year but in the beginning of the year that's where it actually started and in 2020 uh and and sorry 2020 we actually started going up positively but because of covert it kind of delayed things then 2021 got crazy uh so I think that when you're looking at the pivoting to the new year is definitely a huge thing and and a huge thing for human psychology which obviously drives markets uh and I do think we're going to spend the next six you know seven months convincing people guys it's not going low again it's not going to the lows again maybe we get close to it and maybe that's the last the last thing we have to do is that we have to go back down to near the lows for all this liquidity to come in and basically say no you know you're not

going back there you know we want to buy here and then continue on we don't know exactly how that's going to play out but yeah I think I agree with you in that it it definitely feels like if we look back in 12 months we'll be like you know that was the start of the bull market here yeah definitely I'll I'll leave everyone with this you know the level we have to claim and defend before the bull market right it's 2500 so yeah your last top prediction uh in the last oh my God which is kind of funny um but as I said like you're saying what 15K this cycle for eighth and we went two times your prediction last cycle so it's it's 30k that's how it works right maybe 30 right yeah I'm going 15 I'm going 15K this slightly cool I don't

know when it's gonna happen but I know it's gonna happen I don't know if you look at like multiples they go down I think it was like two cycles ago was 120x I think last cycle was 60x I want to go with something around 20 to 30 x this cycle which I think puts us 15 20 grand range so I'll go a little conservative 15. and I look I don't have a crystal ball don't be by any you know based on this this is just my hunch so like you said I mean I said 25 last cycle I sold a good amount of either 25 but you know what we're below 25 now so I don't feel too bad about that um and I sold up a little bit towards the top too but you know I've got plenty left and I'll be looking at him you know

I actually won't be selling much to cycle to be honest with you when I'm state would I have stake now and we've talked about this a lot but what I have to take now I'm just keeping I mean maybe I'll if we really get crazy 15 20 25k something of course I'm gonna have to take like something off the table but it'll mainly just be staking rewards that I've earned over the last two or three years um I I have a permanent stash I'm just I'm waiting for well beyond 15K at this point yeah yeah and I think you know even if like I think that's what people don't understand even if you sell at like a low price comparative to the all-time high like selling at 2500 instead of what the whole time while which was like 5K right it doesn't matter because you could just buy back

in in the bear market and you've had plenty of time to buy back in below 2500 and being in profit right and and be able to buy back in with uh you know at a lower east price I mean imagine you did this and and it's very hard to do this but imagine you know you sold it at 2500 but then you bought it back at like a grand right like you just did an amazing trade it took a while to do it obviously but you still did an amazing trade even though you didn't hit the highs um or the exact lows and I think that's what people missed they're always like oh you have to sell the all-time high and then you buy the low it's like yeah okay good luck with that have fun trying to do that fool's Aaron man Fool's errands I mean this yeah it's such a

good point people obsessed for some reason was selling tops and buying bottoms but if you just if you sell somewhere near the top and buy somewhere near the bottom I mean you you do great right I mean this cycle yeah I sold a good chunk between two thousand three thousand but I and I didn't really really re-buy too much at the bottom but last cycle you know we topped out of 1420 I sold a lot of like 950 but I re-bought a bunch of like 80 or 100 so I mean look maybe I didn't hit Top exactly but I hit bottom decent if you can be in that range right I really it's great advice do not obsess over top and bottoms right create a cell plan that works for you set some of that aside rebuy like we're gonna cycle it's not

like we're gonna go to like 100k and never come back right like we always are going to cycle as human nature to cycle um so yeah no I I mean I I really do like that advice yeah exactly and I think people shouldn't feel guilty for selling or anything like that at the end of the day like in as much as we love ethereum and love eighth eighth is an asset it is not something you marry uh you know if you want to keep it forever and stake it and earn obvious they can rewards that's totally fine if you want to sell it all because the price went to like 10K and and now you've got a lot of money to do other things in your life there's no shame in that at all right and I think people sometimes feel guilty about like I can't sell you know I'm

like you know doing bad by ethereum no at the end of the day as you said things cycle people are going to sell people are going to buy most majority of people are gonna you know I I'm not married to their Investments um and the ones that do well a lot of them you'll see them on Twitter they they look they're very easy to spot they're coping and they're what we call bag holders so you don't want to become that you're weathered yeah exactly exactly um cool well I think that's the perfect uh note to end this podcast on today uh that was great I really enjoy talking about the markets for a change I guess over um you know some of the tech stuff but I think they all kind of intertwine a lot people sometimes try to I guess reason about them not intertwining but a

lot of crypto is still speculative I would say most of it is speculative so yeah prices play a huge part in in that but uh but yeah this was this was great yeah good to be back um I will do it again I think in like two weeks or something like that but again appreciate you having me on uh daily Quay I'm glad I can add a little fresh uh Insight here and it's always fun to talk about markets so I'm sure you know there's plenty of tech to talk about but like you said they uh they intertwined for sure yeah for sure for sure all right well on that note thank you everyone for listening or watching you can subscribe to the channel for more of this and yeah as Eric said we should be back in another two weeks