DeFi Dad: Why Ethereum Is The Future Of Finance (Issuance Thesis)

Transcript

The question here is, and I think this is like, is pretty apparent. Do you have any thoughts on decreasing ETH staking rewards so ETH can return to ultra sound money? Total ETH staking is approaching about 40% largely due to Lou, largely due to Bitmain. So, the question here is like >> Yeah. >> you know, Tom Lee's being an advocate for like, we want to decrease the issuance, we want to, you know, or perhaps I'm not right on that. You know, there's been a lot of talk about it. What do you think about this? How do like is decreasing the ETH issuance and staking >> I think I have a good simple answer on this. Uh so, there's two camps that I know of.

>> [clears throat] >> One of the camps is there's a camp that I've heard say, "If we decrease the issuance, we are ultimately going to, you know, lower that inflation of ETH." And again, maybe we get back to this ultra sound money narrative. Um I personally don't think it's necessary, but I understand some of this is coming, supposedly some of this is coming from Wall Street. There's There's like some sort of influence there. And again, I It could be just and rumors.

But okay, let's let's assume that that's true. So, there's a camp that says, "Hey, can we just lower the inflation even more?" There's another camp, this is probably the camp I'm in. I'm like, "Until more arguments are presented to me that like convince me otherwise, I believe that the ETH staking yield is like the, you know, the native T-bill rate of of Ethereum. And when you think about like what makes the world go round, our whole economy really like ultimately is so reliant on these T-bill rates. Like And so, if someone said, "Hey, we're going to just cut it in half, and this is going to make the American dollar that much stronger." You're like, "Listen, I can

like rationalize and try to understand what you're saying there, but like you're just you're just like glossing over this like like we'll just make the change. So, the thing I'm most sensitive about with this is that there there's been a lot of criticism over the years and uh this might be just be like crypto Twitter criticism. Maybe this doesn't exist outside of our little bubble, but there was a criticism that hey uh we need Ethereum to basically like stop making changes. The truth was was Ethereum was scaling the L1 and you know working to obviously enable a world where L2s can can work even better on top of it. And so, yeah, we we've got this we've got this all playing out and

I think that the best thing that ever happened was Ethereum hitting its 10-year anniversary. I think it was like a wake-up call. Holy this thing's never gone down over 10 years, it's resilient. By the way, what does that remind you of? All the arguments we make about Bitcoin being unchanging and predictable and just being simple to understand that this thing continuing to produce blocks is actually its greatest value. Ethereum being a much more like complex and nuanced machine that all the all of DeFi is built on top of, people sometimes lose sight of that and forget that hey, the fact that it just keeps producing blocks and it has all this client uh diversity and the fact that everyone builds on it with the

understanding that they will continue to be able to predictably build on it, like this is its real value. So, my fear going back to the uh changing the the staking issuance is I I just I don't want to give fodder to our most fierce critics, but believe me, if someone can make the argument, if the community can come to an agreement that this is ultimately going to benefit Ethereum's ability to continue to host the most vibrant DeFi ecosystem, continue to be the most secure L1, and continue to ultimately have that priced into the token over the long term. If the If that will all play out, then sure. I I could get on board with

it. But, I'm I'm still I'm pretty I'm I'm in a in the camp of like, can we just please talk more about this and debate more? Have a Like, I just I hope that I I hope that, you know, someone like a Tom Lee >> Yeah. >> he could be a great person to translate this and like let us know like, okay, well, like what do the biggest capital allocators in the world who have exposure to ETH, what do they think about this? Cuz we need to know now, not just those of us who are like the long-term weirdos who are in this. So yeah.

>> Yeah. Yeah, I mean um Yeah, it's interesting. I mean, people want capital gains and they want the income, right? It's the same thing with with with the team. >> I would hate to use that. I'm I'm sorry, I would hate to lose that uh that yield. I think that 2% roughly a little over 2%. I think that it underpins the whole economy, and I think like yeah, when I think about my own DeFi portfolio, I mean, just reminder, I was not in the ICO. >> Yeah. >> I started looking at ETH when it was around 300 bucks, but I had no money to buy much more than a few ETH, and then I lived through that bear market trying to find a ways to like scrape together whatever money I

could to buy, but like I I was by the time I had uh really like I would say like some savings, I went from like $50,000 of credit card debt at one point to being able to like we we bought our home. We We saved money and we bought a home, and that's when I was like, okay, now I can really start to like focus >> Yeah, yeah. >> on allocating more here and finding ways to store wealth over time in that. So, I get it. I know like I I understand when someone says I feel like I was late to ETH. I'm like, join the club. I was too, you know? Like, it's it's fine. Like, it's like I still believe like the the market cap

of Ethereum right now should be in the trillions based on just all the economic activity that it hosts and the fact that if you destroy the Ethereum network tomorrow, you take down what something like conservatively 60% of all DeFi activity. Probably more though because of all of the dependencies on L1. You know, everyone ultimately L1 almost Ethereum L1 almost acts as a hub between all these chains. Whether Solana likes it or not, folks love to go in between these chains and somebody did a map of all of that and like it's it's crazy to see like the volume that's flowing back to, you know, the L1. Even if you're a hyper liquid bull, you're hugely reliant on Ethereum.

>> or Ethereum. It all is