Lido below 30%, Bullish ETH rant and more - The Daily Gwei Refuel #760 - Ethereum Updates

Transcript

hello everyone welcome to another episode of the de refuel where up latest news the ecosystem I'm your host and this is 6th of April 2024 all right everyone let's get into it so apologies for missing the last two days worth of episodes everyone just unfortunate timing I didn't have enough time to complete the the refuels so I kind of to skip those days there but you guys get a special satuay episode as it is uh there and hopefully this episode will be a bit longer than usual to make up for the last two days of no episodes and I will also say that at the end the episode I'm going to be doing a nice bullish rant I feel like we're in need of a bullish rant given the I don't know perceived bearishness I'm going to call it of crypto Twitter and other places around

eth lately but without further Ado let's kick it off with the news from the last couple of days so we had some ETF related news now I really want to clarify some things around this because I saw some people get excited about this and I want to clarify things because I don't think it's stuff to be necessarily excited about so the first bit of news was that the SEC has asked for public comment for grayscale bitwise and Fidelity spot e ETFs now the reason why I say this is not something to get too excited about is it's because it's not really the back and forth that we expect to see from the SEC and the issuers because this is something that the SEC is legally bound to do they have to ask for public comments from anyone not just from the issuers on these ETFs it's part

of the entire basically you know entire process it's part of the legal process uh and it has to happen U you know if the ACC had already denied the ETFs and obviously it wouldn't have to happen but it has to happen while the ETFs are still in flood here so not necessarily anything really positive to point to it's just kind of part of the Motions part of that paperwork I was talking about uh but you know I think people looked at this and they kind of got the wrong idea so that's why I wanted to kind of put that out there and there was a second bit of ETF news here from from Nate where essentially there this was basically JP Morgan saying that if there is no spot eth ETF approval in May then we assume there is going to be a litigation process after Maz and that

was directly from uh one of JP Morgan's um managing directors and Global Market strategist Nicolas I don't know how to say the surname here you can see it on my screen it's a long surname I'm not going to try and pronounce that you guys know I'm terrible with that um but I mean this is just confirming what we already know right like if the ETFs are denied in May we're going to see grayscale Sue we're going to see probably other other kind of issue with Sue here uh but we don't know what reason the SEC is going to use to deny the ETFs the the two top reasons they can use and the two I guess reasons that people are speculating that they're going to use the first one is that the futures spot correlation is weak so the SEC will basically say oh it's too weak

to approve an eth ETF because there's possible manipulation and fraud going on in the eth markets and we know that's because we've seen two independent um analysis done by bitwise and coinbase showing that e e um e correlation between spot and Futures is just as strong as btc's if not stronger on some time frames and we also saw the sec's analysis which no one has really been able to recreate uh which showed it was weaker so if we've got two that have published their methodology and that AR the SEC showing that it's strong then I don't think that we should be listening to the SEC on that front um but yeah that's that's the kind of first reason there and the second reason people believe they're going to use is that they're going to say that eth is an unregistered security and they cannot approve an ETF for an unregistered

security now I think that out of those two reasons if if they're going to use anyone it would be the correlation one because using the security one as I've mentioned before just opens up this massive Pandora box that like isn't just got to do with the ETFs now it's got to do with basically ethers asset and then has much wider complic complications and implications for crypto as a whole so I don't think they're going to go down that road because it's just like the worst possible path like it's it's more than scorched Earth it's basically like a nuke essentially into basically everything that we've having to deal with with regards to the regulatory kind of um stuff going on in the US here and the last thing I I'll say on this I I don't want to spend too long on the ETF stuff today uh but the last thing I'll

say on this as well is that you know I think that we're getting closer and closer to May 23rd here I know I've said before that by mid April you know maybe even like into more lsh April if you don't see anything between the SEC and the issuers then I think it's pretty safe to say that the ETFs are not getting approved uh on May 23rd there but I think the general consensus is is that everyone knows that the ETF atfs are going to get approved eventually anyway so whether it happens on May 23rd or otherwise the general consensus is that these things are going to get approved I at this point in time still believe that there is a chance they're going to get improved on on May 23rd I'm pretty confident still um but that confident can change confidence can change rapidly and you know you guys

know my little meme I do on Twitter where I say study May 23rd you know I think people may have got the wrong idea about that because uh of my bullishness towards the ETFs getting approved people took me saying study May 23rd to be like you know study May 23rd because that's going to be the date the ETFs are going to be approved but it's actually broader than that and I maybe I haven't done a really good job of explaining this before but the reason why that date is so important is because whether there's a denial or an approval there are so many broad implications of either of those decisions if there is an approval if basically means that the SEC can never ever go after eth as a security like it I mean if if if they did that they would be going against not over the

fact they' be going against themselves essentially and they already would because they already approved Futures ETFs right but they will be going against themselves even more um and I wouldn't say they can never go after eth as a security but the thing is is that like they would never be able to build a strong case because of the fact that they've already done these multiple things where they've showed that they don't believe that eth is security from like an agency perspective here um and two it also opens up other crypto assets uh to basically not maybe not be classified as like you know Securities or not but opens up the discussion there even further like the approval I mean the approval is the best case obviously it's the positive case but if there was a denial uh based on any reasons I think there is obviously implications of that

because then we start the circus of the SEC getting sued what do the courts going to say are they just going to repeat what they say with the BTC ETF um or sorry I should say the gray scale BTC um ETF case from back in October then there's a whole kind of thing there so May 23rd isn't just an important date if the E ETFs are approved it's obviously going to be an important date if they're denied as well because it has broad implications for the ecosystem there but anyway enough on the ETF stuff don't want to spend too long on that I think I'm going to talk more about the ETF stuff at the end when I do my bullish rant obviously the ETFs you know if approved will be bullish so I'm going to talk a lot about that but moving on from

that stuff uh just an update here on the alexe perv and Roman storm trials uh these guys are the ttic cach Developers for those of you who don't know uh and there is a tweet thread here from the free free perv and storm um Twitter account which you can go read about all about the trial and everything and it's basically summarizing everything that's been happening so far so I won't read this out for you guys I just wanted to highlight it for you guys to to go check it out and this isn't the account that you can follow for more updates on all of that there all right moving on to some uh allore Dev recap updates here so there is a lot of talk obviously about Petra right now and everything kind of going into Petra you know we know that Max EB is probably going to be the

headline EIP of pectra but there's a bunch of others that that the core devs are disc ing right now so Andrew here put on Twitter basically a a screenshot of Alex stokes's recap of the call dev's call so you can go check that out I'll link it in the YouTube description below um from what I saw there was a lot of talk around Max EB and around essentially like any edge cases that could happen and I think one of the edge cases was that um they need to be able to essentially do it so that there can't be any kind of funky stuff going in with the accounting of validators so I read on Twitter and I don't have the I don't have the tweet in front of me but essentially one of the issues that I believe has been fixed uh there was a

proposed fix put forward and I think the C devs accepted that fixed but one of the issues would be that there'd be an accounting error where essentially if you were to like consolidate validators um there could be I don't know if i' call it an attack but there could be I guess like a consequence where essentially the validators are Consolidated were able to get more rewards than they're otherwise allowed to get because of the fact that the um the the chain I guess like the the the the consensus layer didn't handle the consolidation properly and there is a fix being put in place for that uh and as I said I don't have the twin in front of me and I don't know off the top of my head but those are the kind of edge cases that need to be discussed that need to be figured out those are the

kind of things that you absolutely need to figure out before you put these things live on the network and these are the kind of things that can be showstoppers for eips at times right like if you say we get to like really late into the process of um of of developing and designing Petra and then essentially what happens is that someone finds a possible bug or some possible Edge case that wasn't considered before that can lead to eips being dropped from upgrades uh just because because the cevs are very conservative they wouldn't want to put something in where they have you know they've been working on it for months and months and then suddenly there's this new Edge case but in saying that not Edge case is you know created equal not kind of every bug is created equal so if it's a minor thing it

probably won't result in the IP being removed but it's more if it's like a major thing here but I don't think that this is a showstopper for Max EB it seems like we're just working through the motions here but yeah as I said you can go check out the Tweet I'll link it in the YouTube description below it's got all of the relevant information from the latest all core devs call here all right moving on so Tony has tweeted out about EIP 7623 which is aiming to reduce the maximal possible a maximum possible El payload size from 2.8 megab to 1.2 mbes this adjustment sets the stage for increasing the number of blobs and all the block gas limit in the future so essentially this is basically swapping out one part of I guess like ethereum for another part in terms of like what

uh we can use and what I guess like we can utilize on chain and you can go give this a read I'll link is in the YouTube description below um and but this is basically uh about basic reducing I think reducing the um the SP the the capacity that call data has or increasing the cost of call data in order to essentially eliminate that state growth part of of call data and basically give that state growth part to blobs for example so essentially it enables us as Tony said to increase the capacity of blobs you know increase the number of blobs and or the block gas limit in the future giving us overall more scalability so you can think of it basically like more bang for your bucks so to speak without altering the um you know the overall size of the chain altering the overall size of the state

so that we don't make it harder to stall the chain we don't make it harder to kind of keep up with the chain you know sync the chain and all that sort of stuff so these are the kind of things that are going to be done you know going forward in order to make the overall chain more efficient now that basically cold data is I mean it's not useless but it is not being used at all by the layer 2s anymore well I shouldn't say at all there are still some layer tws or some rollups that are using call data but we expect you know going forward that they're not going to be using C data and we actually want to prevent them from using cold data because essentially what can happen is that blobs can get more expensive than cor data to use because

the blob gas price can be higher than the normal ethereum L1 gas price and then the l2s or the rollups could be configured to go and use call data and that isn't what we want that isn't expected Behavior that's not like the behavior that we want to encourage on the network so that's why there is this EIP in order to increase the cost of Coe data so that that doesn't really become a thing that happens there and that rollups just using blobs here but you can go give this research post a read I'll link it in the YouTube description below for you to do so all right so another chart that Tony uh kind of posted here was one with regards to what the blob usage looks like so I think that blobs over the past couple of days stopped being consumed by inscriptions and now just basically

consumed all by rollups so I think if I bring up hill Do's blob dashboard here you can actually see what this looks like and I remember I covered this I think last week but essentially you can see here if you go to uh blobs you can see the purple was inscriptions or blob scriptions as they've come to be known and they've just died off completely now uh but you know the activity is basically all all rollups right now all the rollups that are using blobs right now now we can expect basically this to continue up over time this to Trend up over time given that we expect more rollups to come online they're going to want to use blobs we expect the existing Roll-Ups to increase their own capacity which means they're going to increase their onchain footprint because they're going to have more data to post so you

know it's not going to go down or anything like I don't believe like if you take away the purple here B I mean I think I can take away the purple yeah you can see it's pretty steady with all of the other colors which are basically all the rollups here and as I said like that is going to be both steady and growing over time as rollups get bigger and bigger now we don't know if people are going to do inscriptions again within blobs they might but as I've described before as I've discussed before it's totally pointless to do inscriptions on blobs because they expire right there is absolutely no point to do them inscriptions the whole point of inscriptions and the whole value prop of them originally uh because they started on bitcoin was essentially that you could store it on chain forever it wouldn't get you know expired from

the chain and you could basically store like all of the nft essentially onchain so that it is a fully onchain uh nft I mean that's from my understanding of it now obviously that doesn't fit in with blobs at all because blobs expire so it was more of a I guess like what I've discussed uh previously it was more someone trying to start some speculative Mania around it but that seems to have fizzled out now it might come back as I said but as of now I don't think we have any blob blob scri at all like you can see here I don't think there's any purple right now at all currently so yeah you can go check out the dashboard and Tony's um screenshot there Tony's Little chart here I'll link it in the YouTube description below for you to do so all right so in case you all didn't

notice Lido's market share of staked e is now below 30% uh and it's still with puffer's massive $1 billion or more than1 billion vampire attack is still to come uh this is great to see because it's basically validating the thesis that I've been going on about for a very long time now about the fact that more competition in the ethereum staking space will kill L's dominance and it hasn't killed its dominance yet but it has reduced it and has stopped Lio from growing and as I've shown plenty of times before you know Hill duby's dashboard here of the E2 staking landscape you can actually see this if you scroll down to each of the kind of tables and charts that he has like I love this chart down the bottom here which basically shows the E staked by entity now the big blue part at the

bottom or I guess light blue part at the bottom B is Li and you can see that Li has been you know relatively flat uh for for quite a while now I mean it's kind of gone between like 30 and 30 almost 33% uh sometimes it's di below it under 30% like the last time it was under 30% was in December oh sorry February of 2023 so about a year ago now or something like that uh and now we're at like 29.7% or something uh and we're in obviously April of 2024 so it's over a year and that is obviously since um Chappelle went live as well it seems to have been kind of down only because there's a lot more steak coming in we have the the Aven of reaking of course there's a lot more staking services online now as you can see with the other

colors kind of popping up here um and they have taken steak away from Lio and they've also prevented more steak from going into Lio so if we look at the past six months what the uh inflow of steak looks like you can see Lio still has a very healthy 724 th000 fresh eth went into Lio but you can see that they're actually not number one ether fire was number one with 96,000 eth going into their service and then you have all this other eth going in with these other services you know mantle at 500,000 Renzo at 500,000 Kiln at 400,000 so you add all those other ones up and they just absolutely dwarf Lio and that's why Lido's market share has gone down by you negative 2.7% and keep in mind this isn't even looking at puffer right now because of the fact that puffer has just

taken in St they haven't actually staked it on their own service and I'll talk about puffa in a sec um but essentially yeah they have over a billion dollars worth of St to take out of life which is you know obviously crazy uh and that's still to come now if you look at the the last kind of month here this is where it looks really kind of crazy for Lio so if you look at the top uh you know the top uh kind of Stak is here if you scroll down you can see that Lio is like number 54 so it's ranked 54 but it hasn't had inflows over the last month it's had outflows of over of 300,000 eth which is massive obviously and there's been outflows of figment outflows of okx outflows of binance and pp. and then all the inflows have gone into of course the

liquid staking and reaking platforms here um which obviously makes sense because at the end of the day people want to be able to one Farm the points of these Pro of these um services so obviously Farm the potential aird drops the tokens a token and eat thei and swells and puffers and so on and so forth uh and they also want to get liquidity for their stake as well so we all know that Al and Al are incredibly popular but yeah the alls is what really changed the game because they're they're reaking now Lio doesn't have native rest staking so essentially what happens is that people will go into you know hold an S and they'll deposit it into igen layer but uh that's not a native R staking token for lighter you have to take it and deposit it in and there's caps on that as well and oh ligher

already has its token out there there's no token incentives there so essentially all these other Protocols are basically doing an ongoing vampire attack on Lido even without directly doing it because they're essentially being like hey you know come over to our new park over here or our new attraction over here we'll give you tokens we'll give you incentives and you know you'll make more money with us will give you an a liquid reaking token instead of an LST and you'll Farm IG layer points so there's all these incentives going on that has really changed the the look of the ethereum staking makeup over the last um you know last year at least I mean the last 6 months especially and you can actually see here what the ranking looks like as well on Hill Dobby's dashboard so if you go down uh I think the ranking

is uh where is it um in terms of like market share yeah so uh it's up the top here so e stakers uh sorted by market share you can see that ethery for for example one of the newer liquid reaking protocols over the last kind of 6 months uh their market share has grown to 2.9% they are the number five now so they are a top five staking protocol um where and and you know they've even overtaken something like Rocka poool because Rocka Pool isn't a native liquid um reaking platform either right it's a liquid staking platform but they have a lot of upgrades coming as well they've just been heads down building but again they've already done their token right there's no really token incentives there there is a little bit of extra on top if you kind of are a not operator but but

there's no incentives for if you were to kind of like just buy the re token right whereas with um these other things with eify and these other programs out there they're giving tokens right now so that's why you've seen a lot of the the growth there and they're also offering different kind of products too of course like eat the fire has a bunch of other products that they're offering there but you can see that that's just a crazy kind of difference uh you know in just the last 6 to 12 months especially I mean the last 6 months really for either fight you can see their growth here is just ridiculous um but then you kind of scroll down and yeah the whole saking ecosystem is just looking a lot more diers and distributed right now and I think that's just a huge win for

everyone I think it's a huge win for ethereum and I think it's great to see that Lio is actually below 30% here now of course we'll see what this looks like in another year from now when all these token incentives have been exhausted when Lio possibly be you know implements a native liquid reaking module as part of their their whole setup here uh but it's great to see that we have a more uh diverse uh I guess like biging chain right now and as I said it's really great for me to see my thesis validated that you know we would see a great reshuffling of AK because of the fact that uh we we know chapella went live and the D risk taking and then we have the Advent of all these new kind of competition coming online um so yeah it's just great to see that finally uh

play out there now staying on the topic of staking just wanted to quickly mention that puffer's public testet is now live so for those of you who don't know puffer is not live yet in terms of like their infrastructure the node infrastructure essentially what you can do right now is just deposit s with puffer and you can Farm their you know their points and you get like puff eth in return but the puff e is just a representation of St e it's not actual kind of staked puffer e for example um but whereas with this public test net now launching they're inching closer to their main net where essentially with their main net they're going to be staking this as part of like with with their not operators essentially creating real kind of puff e and not just backed by St and as I said that St is getting

directly withdrawn from Lio and that eth is just then going to be staked with um with puffer's own infrastructure becoming essentially puff e you know actual puff e not like puff eth back by teeth right and that's huge I think there's if it's a billion dollars I think it's more than a billion I think it's like $1.2 billion Worth or 1.3 billion worth of St so it's like what 370,000 St or something like that that's going to basically be vampir you know a very short period of time taken out of Lio and directly into puffer here which should rocket puffer up to at least the top 10 I think staking protocols there with like a 1.5 to 2% market share overall so great to see that kind of playing out there but if you want to get involved in puffers public test net you can I'll link uh the tweet in the

YouTube description below for you to go check out there all right so I just wanted to share this little video here from Cairo on Twitter so essentially what they've built here is an implementation of a based pre-confirmation protocol leveraging reaking so this is a proof of concept for subsecond transaction confirmations on ethereum and you can find out more about how this works in this Twitter thread here which I'll link in the YouTube description below but this is great great to see I mean based pre-confirmation is something that that Justin Drake has been talking about a lot lately it's essentially this concept of having a I guess like so so I mean I don't want to butcher the explanation here because like I'm still learning about this stuff this stuff's pretty cool but I've uh there's so much other stuff to learn about I just haven't had

the time to learn about it too much but from my understanding essentially what you get is a cryptoeconomic guarantee that your confirmation your um transaction is confirmed but it isn't kind of like onchain yet so essentially you get like what's called a pre-confirmation and it's crypto crypto um not cryptographically crypto economically secured as part of an igen layer uh kind of service y like an IG layer AVS service for example where essentially if someone was to not post that transaction on chain uh they would they would get penalized right if someone was trying to do something funky with that transaction they would get penalized at least that's my understanding of how this works here now you can see in this video the reason why you want to do this is because with a based pre-confirmation you can have a pre-confirmation within uh 0.1 seconds essentially So within a tenth of a

second here which is 100 milliseconds really I mean this is 90 milliseconds in the screens in the in the here whereas if you want to have like finalization of your transaction on chain obviously on ethereum that's going to take up to 12 seconds because ethereum blocks are 12 seconds or etherum slots are 12 seconds so you can't actually have it added to the chain until that 12 seconds happens yeah but to have true finality you have to actually wait for two Epoch which is like 13 and a half minutes but we're working on single slot finality and all of that as well but this is all about you know confirming your transaction on chain not about finality of your of your kind of like transaction or at least like the economic finality that ethereum gives you rather than uh you know the uh the layer 2 gives you here and as as as

I forgot to mention just before this is all about I guess like layer twos right this is all about giving a pre- confirmations on layer twos using the layer one but also you can do potentially do this on layer one as well um but really it's targeting layer twos because essentially on layer one we expect it to be high value transactions not the lower value transactions just by virtue of layer one being more expensive so we want to focus on the layer 2C for the end users there uh but yeah you can go check out this video for yourself I'll link it in the YouTube description below for you to do all right so to round out today's special Saturday episode I have a bullish rant for you guys I'm going to start off by saying I know it's tough out there right now I

know there is a lot of fud about ethereum and eth and I don't necessarily know why to be honest I think that it's the same old fud that we've been seeing for like years now basically it really feels like for some reason people are just hating on ethereum like for no reason essentially where essentially they're bringing up all these things that aren't even true at all like there are things to criticize ethereum about like a lot of things actually and that's totally fair but for some reason the fud just loves to focus on the things that aren't even true a lot of the times and I put out this tweet where I said that you know ether's a deep value bet at these levels the fud around ethereum and the l2s and ether as an asset is just too damn high and almost all of it

doesn't even make any sense the ethereum ecosystem is the strongest it has ever been this is an objective truth long ethereum and long eth and I mean it is an objective truth that the ethereum ecosystem is the strongest it has ever been and there are multiple reasons for this right but I think that if you just to look at the onchain ecosystem alone there is more usage of ethereum right now with the l2s because the l2s are ethereum than there has ever been in ethereum's history so it boggles the mind that people can be bearish on ethereum when we literally just reduced fees with 4844 that led to a massive surge in the ethereum economy and it's just the beginning so really as I said like none of this fud makes sense here but what I want do is I want to break down each of the things that I'm really

bullish on for the next like many years into the future but let's keep it let's keep it relatively you know medium-term let's say the next 12 to 24 months these are the things that I most bullish on in ethereum and these are the things that I don't even think you have to kind of make many assumptions about to be bullish on these are things that are already true today I'm just assuming that they're going to keep growing from here so the first thing and I think this is probably the most obvious thing is the continued institutional adoption of ethereum as an ecosystem and I'm not just talking about the ETFs guys like the ETFs to me are a given whether they happen on May 23rd or not it doesn't matter the ETFs for eth are coming it's a given it's just a matter of when not a

matter of if but if we look at the broader institutional adoption of ethereum let's start with black rock here Black Rock has a tokenized fund on ethereum $250 million is in there right now on ethereum L1 like not on a test net not on a private network not on on some testet L2 that they're building on ethereum L1 the ethereum L1 we all know and love that we all use you know whether that be at directly at L1 or at L2 Black Rock the largest asset manager in the world is already doing tokenization on there now of course Larry fin has gone on all you know the different media platforms and said that he is really bullish on tokenization that black rock is really bullish on tokenization and it's not just lip service it's not just him saying it they're actually putting their money

literally where their mouth is right so that is just one example and you think that's you know you really think that's going to be the U the only example heck no it's going to keep growing from here and this is part of the broader real world asset Trend that has been happening for you know quite a while now at least 12 months now and I actually remember one of my predictions from even longer than 12 months ago was that real world assets would continue growing and would become a main theme for ethereum for the many years to come because it doesn't make any sense to me that these larger institutions aren't going to want to come onto ethereum uh whether that be at L1 or L2 and get all of the absolutely amazing benefits of an onchain tokenization platform essentially I mean ethereum is more than

but that's what they're kind of treating it as here you know you have the cheaper costs yes ethereum L1 gas fees are high but hey like in return for those higher gas fees you get the world's strongest and most secure sediment layer and that plugs into basically everything like it even I mean it already has infrastructure with both centralized players and decentralized players it plugs directly into coinbase obviously uh and and black rock obviously uses coinbase as well and has Partnerships with coinbase 2 and and and and have relationships there so for them it's like a no-brainer for them for them to do this so the costs overall are way lower for them the speed the efficiency is way higher I mean even ethereum L1 at a 12C block times is so so much faster than anything in the trafi world it is

global it is permissionless it is seamless guys like it it is and is only getting better over time whereas the tradire ecosystem is Band-Aids on Band-Aids on Band-Aids it's pretty ux on just like really shitty backend and I think if you were to use kind of an analogy here or I guess like a mental image here I don't know if you guys have ever seen that image of Homer from the symptoms when he's got Clips behind his back you know clipping all his back all his fat to his back and then like he's looks skinny from the front that's what tradire is you've got like this nice looking thing at the front and then on the back end it's just UT of basically right whereas with um with ethereum okay it's not perfect with you know ethereum L1 and l2s they're not perfect they're not looking like this

pristine thing and but it's the opposite thing where the back end is actually so much more amazing than anything we have in the tradire ecosystem it is built from the ground up to be like that and then the front ends are getting better and better over time and the front ends aren't just going to be pretty with a you know with a disgusting back end they're both going to be pretty essentially so that is critically important here I mean I think that's one of the most important things here and that is one of my main bull cases for ethereum as an ecosystem is that uh these institutions are going to keep using it as a platform and then the fact that black rock is already using it and they're the largest asset manager in the world this sets a standard guys this sets a basically a shelling point for

other institutions this is Black Rock sending a signal out to the world saying that we think ether L1 is worth tokenizing on is worth putting money on what do you think all these other asset managers and all these other tradire institutions are going to do what do you think they're going to use they're going to use ethereum whether that be at L1 or L2 doesn't matter it's all the same they're going to use ethereum ethereum is going to be the thing that institutions uh use at scale here um and it's going to be a slow process it's not going to happen overnight but it's going to keep happening you know this is probably as I said I wanted to try and keep it medium-term but you know this is a decades Long play but during those decades this is all going to be keep happening keep hearing more and stories

until it becomes normalized until it starts becoming exciting like that's going to happen I think relatively soon but definitely going to happen there and then of course as I mentioned the ETF stuff like as I said that's a given and the ETFs are obviously bullish because it brings more new money in um but yeah we're we're all basically in a holding pattern right now waiting to see if they get approved on May 23rd or not uh and I mean I'll talk more about that as kind of time goes on obviously and as we get more updates but for now there's not much more to talk about there now the second major bull case that I'm I'm I I assume and I think is going to continue to being a bull case is staking around ethereum like not just native staking not just liquid re liquid staking not

just liquid reaking but everything that entails and you know I've talked about Igan layer a lot on the um on the on the refuel and I've talked about reaking as a primitive a lot but I don't think I've ever put it in so many words and I'm going to put it I've been thinking about this a lot lately like the last couple weeks I've been thinking about reaking just so much like doing so much more research on it kind of talking to projects building within the reaking ecosystem or building within the IG L ecosystem building abss and everything and I I just like keep getting these Goosebumps these feelings that I that I need to kind of illustrate here so the reason why uh reaking to me is uh is one of the most exciting Primitives is because it enables something that has not been uh I guess like uh possible

before and the same feeling I got when I first discovered ethereum in 2017 I get when it comes to reaking and I say reaking as a primitive I don't want to just like you know Shield Ian layout I lout is obviously the poster child for reaking right now now but there are going to be other projects here so I'm talking about reaking the Primitive obviously I'm really bullish on IG you guys know I'm an investor there uh but yeah reaking the Primitive here and the reason why the reason why the number one reason why it is so exciting and the number one thing that it enables is scaling of trust scaling of security basically making it so that you can spin up something that requires a distributed set of validators of note operators that you need to be able to trust will will you know will do the right thing that

you need to be able to trust be able to to secure your network that you can quickly bootstrap that's essentially what IG ler does it gives you a network of these node operators to choose from and it gives you the economic security to back that up using the best asset in crypto which is eth and yes I know some people are going to take issue with that because people think that BTC is the best asset in crypto no it's definitely eth I'm like I'm going to you know die on that heel eth is so much better than BTC for a number of different reasons maybe I'll get into them a little bit later here this is going to be a long bullish rant by the way but yeah reaking just enables something that we haven't had before which is the scaling of security and Trust which enables so many

different things guys like I we're really only scratching the surface when you think about things like igen da for example like the data availability you think about uh Oracle networks you think about uh shared sequencing you think about um you know layer 2s uh you think about um there's there's there's so many other things like I I can't remember all them all of them off the top of my head but like as I said I've been thinking about this a lot about this a lot lately and even just like a handful of those use cases just absolutely changes the game because you no longer need to boot up your own not operator set you no longer need to rely on some esoteric token to acve Value you rely on eth you rely on eth as a store of value as a money you rely on on the Note operators

that are running ethereum you rely on them and you trust them and you work within the reaking ecosystem to get these benefits from reaking so that's huge part but then staking in general you know even outside of reaking staking in general is huge because it offers a yield and of course we're going to have staked e ETFs eventually it offers a passive yield on top of the fee burn which is basically like a stock buyback I mean not exactly one to one but you know basically is essentially where where E's net deflationary over the year if you take the kind of longer term Trend here uh and then from there you you know you kind of like have that thing where essentially the ETF buyers who are maybe the older Generations who love their yield they start putting money in because of that and it just

kind of scales up from there so that's staking raking obviously hyper bullish obviously going to keep growing from here now we come to layer twos I don't even know why I have to kind of go on about this but I will like I'm I think I'm preaching to the choir about this but like if people look at the state of layer 2os today and they think that the layer twos aren't going to keep growing exponentially from here then they are simply either not paying attention or they simply got their head in the sand like that's the only the two possibilities here we just put the I guess like most basic upgrade live or I guess like the start of the the you know the whole kind of like scalability road map live with 4844 and we've already seen an absolutely massive amount of demand go into these layer twos because

of that because of the fees got got cheaper basically we had all this demand that was latent it came in as soon as we reduced fees and we're going to keep doing that we're going to keep doing that via blobs we're going to keep doing that with things like data availability sampling and data availability uh data shoting as well we're going to keep doing it at the l2s themselves there's going to be new execution environments coming online that aren't just evm but the evm ones are going to keep scaling up like we saw with Bas and speaking of Bas I mean come on coinbase has said that they're going to essentially enable all of their 100 million customers to have their balance in their Wallets on their coinbase wallet available to them on base without bridging that is that is the one to two click solution that I've

talked about in terms of like having a great uiux for end users that is the Holy Grail that is what I've talked about for years now we're getting that very very soon and then all these people are going to come in and they're going to see this on their coinbase wallet because they're obviously going to use coinbase wallet a lot of the time if they're using coinbase because it's a trusted brand they're going to see this and then they be like oh what can I do with this oh I can go do this or I can go use Unis swap or I can go trade for this you know people are obviously going to buy mean coins but hey like I want to invest in this token or it's not on coinbase I'll go do this and it's in coinbase's best interest to push people

to this because it's better from a regulatory perspective it's better for for them to just get on chain it's the dream for them to get on chain I mean Brian Armstrong's original Vision was to bring people on chain like he was a DieHard bitcoiner still is and he gets the ethereum vision he gets the L2 vision and Jesse poak the lead of Bas gets it more than anyone I think I mean I I listen to him on podcast and I'm just like holy this guy gets it like how the hell like where did he come from basically cuz he he's only been you know active over the last maybe 12 to 18 months from what I've seen but he truly gets it he understands what makes this stuff valuable so you have the biggest crypto company in the world bringing their users on chain via base they're

not going to push them elsewhere guys they're going to push them to base they're going to push them to infrastructure that they've built to uh kind of stuff that they've built and that is a layer two on top of ethereum and that's only going to get stronger over time but that's just one L2 we have so many and not all of them are going to be successful but that is the whole point we have a Marketplace of ideas Happening Here we have a Marketplace of competition happening here between all the l2s some will be super successful some will be a little bit successful and some will fail completely but that is the nature of these things and that will be net bullish for ethereum overall now uh of course like I could keep going on about each and every other thing uh that's you know within the ethereum

ecosystem obviously I haven't even touched on the social side of things like farcaster for example haven't touched on nfts you know haven't touched on um you know just social kind of in general not just foraster but lens and other protocols like that but I think that you know those things are earlier right now I do think that they're bullish I think forast has just been a huge Boom for ethereum because it's basically uh tily integrated with bass which is obviously an L2 so that's net beneficial for ethereum there but then you know the ultimate question becomes how does this all flow back to eth you know how does all this value flow back to eth as an asset why should I buy eth or why should I hold eth or why is eth going to go up over the long term why is eth going to be a good asset to hold

when you know for the last 6 months or so it has been an underperformer eth BTC has bled you know um you know these other L1 tokens have outperformed it all these other meme coins have outperformed it so on and so forth you know why would I hold eth okay this is where we get to the portion of like I don't know how long I'm going to go here because when I talk about eth it gets a bit feisty but first thing I'll say here is that if people are looking at the last 6 months and then extrapolating that out to like a multi-year thesis on ethers and asset then they're batshit stupid in my eyes like they're just absolutely dumb this is not a way to analyze assets here also the people comparing eth to mem coins are dumb because memecoins start off at

basically zero and of course they're going to outperform a $400 billion asset if they go up because the only way they can go is up if they start at zero and then they go to $100 million market cap well okay let's say they start at a million market cap and they go to $100 million market cap that's 100x right like but that is like 0.1% of each less than 0.1% % of E's kind of like total market cap so comparing them is just completely nonsensical here uh and they also are not going to outperform over the long term almost all of them will be underperform eth and I say almost all of them because there's always exceptions here but almost all of them will underperform eth over the long term here um and it depends on what time frame you kind of uh look at as well but yeah

comparing them to eth is silly here now when it comes to the other l1s they have their own narratives going for them guys and this is a kind of thing that happens in bull market and I've discussed it before there are narratives that get pushed by people there are narratives that get pushed by people that are holding you know these L1 tokens and it's really good for them to punch up at ethereum because it essentially means that the ethereum people are like oh who are these guys and they start giving them free marketing you know I think that uh the etherum ecosystem this is one thing I have an issue with when it comes to the etherum community is that they fall into this trap a lot and it's not just the etherum community every Community falls into this trap of essentially like talking about these

things and giving them free marketing this is exactly what the Bitcoin maximalist did to ethereum last cycle or I guess the previous cycle where essentially they would non-stop talk about ethereum like all the time and even when ebtc was like absolutely crushed at like 90% down they kept talking about ethereum it's like guys like if ethereum is so irrelevant if eth is so irrelevant then why are you talking about it like just stop talking about it but their hate was stronger than their um you know anything else so essentially that's what drove them that's what drove them to keep talking about it and of course it just gave ethereum all this free marketing and I think the ethereum community is making the same mistake or has made the same mistake with these other ecosystems now in saying that it doesn't mean you can't like point out the the you know the

issues with issues with other ecosystems or point out why you think things aren't going to work I do it all the time you guys know I have big issues with the monolithic road map uh for for these different l1s I have big issues with the monolithic design uh but that's based on like the tech I'm not kind of out here on Twitter talking about them all the time or coping about them whatever like I don't care like to me you know they can do what they want to do they can build their own ecosystems but to me they're not even building anything like what ethereum is building like the ethereum vision is what I want to see come to life the ethereum vision is so unique in what it's trying to do that that's why I focus on it so I'm not focused on these other things but of

course other people do and that of course plays out on the markets because Traders love narratives so they bid up these things so that's the reason why that that has kind of happened there but if we take like a longer term view here longer than six months term view because taking just a six month view on eth is is beyond stupid if we take a longer term view here how does eth acrew all this value well okay you guys know my kind of rankings here first and foremost I believe that eth is a money more specifically a commodity money and a store of value that is where its value comes from primarily it does not come from its use as fee you know as a fee token it doesn't come from its fee Revenue it doesn't come from the burn doesn't come from its use as a staking

uh you know it doesn't come from its use as collateral it I mean it does but like not nearly as much as its use as a commodity money and as a store of value that is by far the biggest value driver to eth okay but what actually gives that value like why would people hold it as a store of value why is it a commodity money well that's all about Network effect the more people that hold eth the more people that buy eth the more people that store their value in eth the more store of Valu Ness it gets the more money it gets I know it seems a little bit circular but when it comes to store of values and and money it's a belief system at the end of the day it doesn't matter if it's fear it doesn't matter if it's crypto currencies doesn't matter

whatever it is it's a belief system you know you could start up a your own community of like 100 people and amongst you you could use whatever you wanted as money as long as you all believed that it was money as long as you all agreed that it was money it would become money and obviously it won't be the most valuable money because it's only a group of like a hundred of you that are actually using it no one else cares about it so really you're not going to be able to trade it for much uh but it is money within that ecosystem so with eth it is money within the ethereum ecosystem it is a store of value within the ethereum ecosystem and that is first and foremost what gives it the most value and that is basically something that all the other value D Feed up into

E uses collateral E uses staking E uses fees E uses on on the l2s to do whatever you want on there um eth's kind of uh use as an investment vehicle all that sorts of stuff that all feeds up into eth being a story value in a money because it increases the network effect of eth it increases the amount of people owning eth increases the ownership share of eth overall that is the bull case there guys that's as simple as I can put it there are so many rabbit holes you can go down into that but that is the simple bull case okay so what is the biggest value driver of E network effect here well what is the I guess I guess like what's the biggest way to get E network effect up it's the scale etherum it's a scale the availability of ethereum block space how do we do that

with l2s okay well what's happening right now and what's going to be happening into many years into the future well the l2s are going to keep growing exponentially so okay in that world how can you be bearish on eth when more and more people are going to be exposed to eth and buy eth need to they need to have eth in order to be part of this onchain economy and that's going to feed into it so like when people are bearish on eth I'm like this doesn't make any sense eth is acre all this value and yes okay maybe it's not performed that great over the short term but if you think that's going to last based on the fact that everything else is growing and e as e value is not growing that's just dumb because we have Direct Value drivers to e we can point

to them we can see them so that's how I kind of look at it there and the final thing I will say on this when it comes to I guess like eth is that I know a lot of people look at the eth BTC chart they look at eth underperforming BTC and they're like ah held BTC instead oh oh wait oh maybe I'm wrong about eth or maybe the Bitcoin Maxes were right blah blah blah so on and so forth but if you actually look at eth BTC a lot of its underperformance or at least most of it is because of the fact that we had the BTC ETF narrative from basically June to like January and then after that you saw e BTC Spike up really really quickly like it went up like 20% or something uh because obviously people just pivoted into eth but then since then over the

proceeding months till today people have lost confidence in eth getting its ETF so because of that it basically became a counter trade where people are like okay well I'm not going to hold eth because like I expect it to be denied the market expected to be denied maybe I'll buy eth after that is that kind of like overhang is gone that's exactly what's happened here like I am very very confident that the vast you know I guess like majority of the reasons why e BTC is the way it is is because of the ETFs BTC has constant ETF flows eth has none of that and on top of that eth has the I guess belief from the market that it is not getting an ETF and that's why I've said before that I believe either a denial or an approval of an e ETF is going to be

bullish a denial Because by the time we actually get to the point where it gets denied everyone who wanted to sell based on that narrative is already sold uh it would have been like a a deep value at that point if have be like very deeply discounted at that point um and then I think from then on it would be the narrative would switch through okay well it got denied now but we know e going to get an ETF anyway and E's like really beaten down so I'm going to by eth essentially and I think you may say that starting before May 23rd the market tends to front run these things but yeah I mean I think a lot of the I guess fud is stemed from that and I I feel like that's the simple explanation is that the BTC uh BTC has those ETF inflows

it's very hard for eth to compete in that environment because it doesn't have access to that pool of money and then as you guys know I've said before I don't actually think there's any net new money coming in from retail investors right now it's really just the same Crypton native money rotating around and they're not going into eth guys like they're going into meme coins they're not even going into BTC like they went into BTC for the for the ETF narrative but now that that's over and it's just like the constant flows they're like oh well you know BTC will be fine because it's got the constant flows uh to offset you know any dumps that it has I'm going to go speculate on these other things so I mean I've talked about that before but I think that's probably the good way to end today's episode there I've gone for

about 45 minutes here so yeah I think that's it for today I hope you guys enjoy enjoyed the bullish rant uh but yeah that's it so thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give it a thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all uh Monday thanks everyone