Should Ethereum Tariff The L2s?

Transcript

What do you think of this this idea, Ryan, that's been floated or or Tom about um like basically tariffs on the L2s? Yeah, it'd be it'd be shortsighted, right, and premature. The uh uh the fact that L2s pay almost nothing to use Ethereum today is a loss leader to grow the network effect of the Ethereum economy across L2s. So, we don't need to charge L2s today. What we need to do is take over the economic world and then you know explicit and in direct and indirect value acrruel will follow through fees through confidence through total value secured app capital. So yeah not not at all worried about this tariff argument of the L2s taking advantage of

Ethereum. It's an absurd concept. Yeah. I I kind of like it honestly to why do you like it? Why do you like it though? Um, so there's there's a few schools of thought. So if you're thinking about Ethereum in the asset and we're trying to bring incremental capital in the space, there are going to be folks who think about it in the direct revenue cash flow generative sense that I said is exactly the incorrect way to think about it. Um, but we can't directly argue with those people all the time. So I think having incremental revenue on Ethereum, especially when these L2s are making something like a 90 95% profit margin on their sequencer revenue, is immensely important. And it's actually on the road map today, right? We're looking towards base rollups in the future which are going to directly

enshrine a lot of these the sequencing revenue that L2s are getting today in Ethereum the the main chain. So like we're we're kind of on the road map there. I I I still again go back to my earlier point. I'm not sure why these L2 tokens exist at this point. They're not serving a purpose. They should be denominated in Ethereum. And if the tax is a way to do that, great. Ryan, I see you're shaking your head. Is that in in agreement or in disapproval? Yeah, I I think that I I I agree with Tom through the lens of uh like we need to hustle to like Ethereum. It's time to hustle and I think the whole community feels that and I think I think we've been living that for at least a few months. So, you know, give us give us a few months longer uh

you know and and in the quarters quarters and years to come. But the the beauty the beauty of the L2 marketplace ultimately is its is its diversity is it is is its inventiveness and based roll-ups are an incredible tool in the toolbox. They're going to be fantastic. You know, as Tom said, this is a technology that increases decentralization of roll-ups while simultaneously causing their fee revenue and MEV to more directly acrue to L1. It's beautiful, but it's not going to be the right solution for all people. It's going to have trade-offs. And there is a growing bench depth of technical approaches to L2 design that provides the the raw materials, the

kind of Legos for the actual goal which is business model design, which is as the very serious folks all across the world come on chain, what is it they want to get out of that? What are their goals? And the L2 roadmap meets them where they're at. And so when we think about this value acrruel and this this tariffing the L2s, the reason I'm deeply unconcerned about that is because it is so unbelievably early for the onchain story and in the years and decades to come. Like Ethereum is going to be 10 years old in in about two months. Ethereum mainet it's very exciting, you know, great milestone.

It's been a it's been a great decade, but the next decade the next decade is going to be extraordinary. like we're going to look back at today and say okay there is uh uh about 60% of all stable coins are on Ethereum. uh it's over it's about 90% if you exclude Tron which Tron's very successful but uh so centralized that it's going to limit its growth opportunities and so all right 60% about 140 billion stable coins issued across Ethereum L1 plus L2 uh you know o about over 90% of those on the L1 what's that going to look like in 10 years and it's really that growth story that I'm interested in I'm not worried about today's fee numbers I'm not worried about about trying to split today's pi. I'm interested in onchain

growth getting a thousandx larger and it's going to be so big and so impactful to the global economy. It's going to it's going to affect so many parts of, you know, not just the sovereign wealth funds and the royals and and the institutions, but all the way down to the peer-to-peer transactions among, you know, rural folks in developing countries, you know, both among themselves and across borders. you know, it it it is going to be this incredible level up for the whole economic system. And the lion share of that is going to happen on Ethereum L1 plus L2. And when the dust settles on that, people are going to realize that Ethereum was much more special and valuable than they thought. And they're not going to be quibbling about, you know, tariffs or they're going to say, "Oh my god, this

thing's a global phenomenon." And it it's going to make alt L1s look and be less important than today. is going to make Bitcoin look and be less important than today. And that's going to drive the value acrruel to Ethereum through confidence and through this big economic picture. So, it's really that long-term growth story that I'm playing for, you know, as as a long-term Ethereum investor and participant. [Music]