Vivek Raman on Why Ethereum Wins the Institutional Race

Transcript

All right, guys. Welcome to Stabledup episode 23 powered by our friends at Frax with their FRX USD product and more stablecoin products that they've been developing for quite a while. We've got Vivek Raman of Etherealize in the space today. Vivek, second ever guest in the nest. Welcome to the tokenization tower. Thanks for having me. It's spectacular up here in New York. Love to be here. Definitely. Absolutely, man. I mean, you've been here for a while. We are coming to understand what it means to be at the center of the world, the center of finance. Like, can you just just give us a sense of like your experience being here and and working here and what it what it takes, what it means to be working here in New York

City amongst, you know, the the most prominent institutions in the world? So, New York City for me has been the most inspiring city ever. It's the engine room for the financial system globally. And so, there's a reason you've had me on before. I'm always pretty permabullish and there's a reason. It's because when you're in New York, the you see the energy, you see the you see the talent, you see the flow of money, you see what's happening and it's impossible not to be bullish. Let's talk the rise of of tokenized assets on Ethereum. Glad to have you on. Welcome to the show.

The rise of stablecoins has happened primarily on Ethereum. Both Tether, Circle with USDC Sky has really grown. Why do you believe building a stablecoin business is best on Ethereum? Is it is Ethereum the best place or where is the best place to build a stablecoin business and how do you think about building a stablecoin business on chain? So, I think stablecoins are the first and most important product market fit for blockchains to hit mass adoption both institutionally and with retail.

And stablecoins unlock all of the use cases which tokenized assets, DeFi, everything else will follow. The reason I've been pounding the table on Ethereum for for a while now and the my conviction is the highest it's ever been and only increasing is because we've seen this movie before with the internet. So, we've seen iterations where every corporation had their own intranet and nothing talked to each other and nothing connected. And in the end, the entire institutional world and retail world chose the public internet to put all their information on. Now, we're seeing that speed run with blockchains. So, where is the safest, most secure place to put your stablecoins, to put your assets on? It's the big, public, secured, decentralized global blockchain where you have the

most distribution access. That's hands-down Ethereum. And, you know, we're we're seeing this this convergence play out in real time. I'm also seeing it as almost like an like an evolution, which is ten tends to happen around these cycles. Um first, we're tokenizing a lot of these assets. We have stablecoins and cash instruments. Now, we're tokenizing both non-speculative in terms of treasuries, stables, but then also speculative assets with tokenized equities. Um after we have all of these high-quality assets, both speculative and non-speculative on chain, they end up in DeFi protocols.

>> Exactly. And and there's two core components to this and I want I really want to get your your take on. The four The first is that Ethereum is a home for DeFi. We have E- Ethereum has the most TVL by that metric. Um it's the safest, it's the most resilient by almost every metric. Ethereum is the home of DeFi. Yep. The second core component here with regards to the tokenization of high-quality assets is BlackRock, one of the leaders in the ETF business, has talked about tokenizing every single one of their ETFs in the next three to 12 months. Cannot stress this enough. We had uh Matt from Bitwise say this is a foregone conclusion when these institutions are talking about uh

timeline of months. These things are actually happening. It's not an announcement of announcement, some you know, thing that might happen later on. So, when BlackRock tokenizes all of their ETF stack, not just their crypto ETFs, but every single one. And they're talking about, you know, one blockchain to rule them all. Larry Fink is very, you know, he's kind of toting this this idea. And Ethereum is the home of DeFi. Like these three things orbiting around each other. Can you just help put together what Once these three pieces do converge, what does this picture truly look like?

It looks like the internet moment for the financial sector all converging to Ethereum. I mean, it's impossible not to be bullish now. Obviously, prices are down. I'm not going to sugarcoat that. But if you Crypto has this bad habit of linking prices to performance of networks, the network has never been stronger, has never been more resilient, has never been more future-proof to scale having layer twos plugged in and ready for the insutial moment than right now. Yep. Asset price will follow. I mean, it's a that's a foregone thing. And I that's just a matter of when, not if. But coming back to what does this mean?

Larry Fink is a pioneer in the space. He's been a visionary and his voice is heard and listened to by everyone else on Wall Street that's outside this window. So, the banks look at it, the asset managers are looking at it. He's one of the leaders um that's that's digital assets forward. And when he tokenized Biddle, um their money market fund on Ethereum before there was regulatory clarity, before Gensler before we got out of the Gensler SEC, that set the standard for Ethereum to be the default. Ever since then, the amount of money market funds on Ethereum has has multiplied. The amount of stable coins on on Ethereum has multiplied. And now Larry Fink coming and saying, "Okay, we need one common blockchain so we don't have fragmentation so all tokenized assets

can be in one place." That means Ethereum. It's the best setup for it. And that means we're going to see the real power of interoperability of the application layer of the DeFi systems. Like you said, they're not just the most They're not the just safest and most secure. They've been battle-tested. So, there is the most amount of precedence. So, institutions will go where there there's the most amount of precedence. I have no doubt that's the theory of men we're about to see a renaissance really, really soon. Okay, so Vivek, let me push back on the value side of this because I I think I totally agree and the audience will totally agree that on the actual where Ethereum and where the stable coins are going to live are going to be on Ethereum. They they will be on Ethereum all the

tokenized assets will be there'll be a lot of transaction volume, there'll be a lot of TVL on DFI. Obviously, Ethereum has the burn which captures a lot of gas fees. For better for worse, the L1's gas fees are the lowest they've been in years which for from a user's perspective it's great. It's like everyone's happy about it, right? But from a burn perspective, it doesn't help the tokenomics of Ethereum. I think there's a bit of hole in the current Ethereum thesis that just because we get all the stable coins and all the tokenized assets onto Ethereum, that's going to lead to a higher ETH price. I'm sure you've heard this before, this is not your first time. But help me debunk this. Why is this thesis true? Like how is this actually going to happen? Talk to us about what that looks

like to capture that value rather than just kind of like this mimetic, we have all the stable coins, we have all the tokenized assets, we're the best. Okay so I'm not going to give you a mimetic answer. I'll give you two answers that I think are very important and very institutionally focused. First off, Bitcoin is becoming an institutional holding. There will not just be one institutional asset that's allocated to in the digital asset space. ETH is the other one. So, we're already seeing it. Harvard had a allocation to the Bitcoin ETF and they actually sold some to rotate into the ETH ETF. That's separate from I'm not linking it to activity, I'm not linking it to the growth of stable coins. I think all of those are very good for Ethereum, obviously, but ETH is going to be a core

holding and if you think of store of values in the space, there's one that's proof of work that's digital gold, that's Bitcoin and that's great. And there's one that's proof of stake with a yield, that's also a core portfolio holding. Institutional allocations increasing to ETH the asset, which is inevitable as Ethereum grows, that's the driver for price. That's that's the new buy interest. Tom Lee's one, ETFs are another, just being in a portfolio allocation. So, that's one. That's how that's how um ETH price grows by becoming the next store of value, not tied to the network. I'm just speaking independently. The second, and I think this thesis hasn't landed for a while, but it's going to.

If we think, as we've discussed here, that most tokenized assets that are high value are going to be on Ethereum, most stable coins are going to be on Ethereum. Tokenized assets and stable coins are all rooted to real-world trust assumptions. So, every single asset has some sort of on-chain off-chain record. So, there's a point of trust for every tokenized assets. As tokenized assets on Ethereum grow, there's only one asset that's global, that's trustless, that can be used to move between these these trusted assets. So, if you think about collateral, if you think about the global ecosystem all coordinating uh and the financial sector all choosing this is the medium of exchange that we're going to trade through, ETH is the only asset that is not linked to something off-chain. That's really, really

valuable. If you think in the future, if everything's going to be tokenized, you need a neutral asset where the US can trade with Singapore, can Let's think really, really big. ETH is that asset. That Again, it's it's early for that, but as that happens, ETH price is to become a multi-trillion dollar asset cuz it's trustless collateral that no one can censor. That's worth a lot for the financial sector. You know, I got to say, man, those are both semi-memetic answers. Like, how is ETH the asset going to accrue the value from stable coins, from payments, from tokenization?

Right now, we have the burn. I know Vitalik's working on other things, and the EF has had this very very big change, but people are wondering like, I'm holding ETH, I'm staking it. Um what what is going to drive this direct value accrual from all of this transaction activity, all these institutions? Is there a direct driver, or should we just stop thinking about it that way and just open our minds to this more kind of okay, there's going to be an institutional driven bid, there's going to be this neutral asset, and this is enough to basically create a store of value asset over long term. I think, again I I don't want to sugarcoat the fact that we're not tying the value of ETH to transactions. I think that that that's a

mistake and that that suppresses the potential of ETH asset. The trustless collateral for the global economy, multi-trillion dollar store of value asset like gold. Gold is mimetic. Bitcoin, honestly, is mimetic, too. So, >> Yep. ETH belongs in that camp. That being said, let's come back to your question. When the world's transactions, the world's tokenized assets, the world's stablecoins are all on ETH and its layer twos, transaction fees, no one's on board yet. No one's using the chain yet. It's all going to come. The institutions are telling you it's all going to come. Yeah, transaction fees are going to go up a lot. The yield's going to go up a lot. So, it will drive value at scale.

If you think about Ethereum right now is in its Amazon moment where it's onboarding customers, where it's very cheap to use, and it's safe to use, and it's the most neutral platform, that's the best customer onboarding pitch that you can possibly give. Once customers are here, fees are going to be higher, revenue's going to be higher, and it will solve itself. But, what I'm trying to do is separate from the fact that, of course, I think activity's going to go up. Of course, I think fees are going to go up. Of course, I think the burn's going to go up and the yield's going to go up. But, separate from all of that, I'm trying to separate the conversation and say, ETH belongs in the category as Bitcoin and gold.

Yep. How much consumer behavior needs to change in order to accomplish this vision? Um right now, so many users are currently interacting with Bitcoin and Ethereum through centralized exchanges. Um when we have tokenized digital assets and stable coins, will people you be using the chain directly or will we be just be batching up a lot of consumer activity and then making rather small changes to the to the underlying ledger? I think that Ethereum and its layer twos have hit the amount of scale where they can support consumer activity and then that's only going to grow with the really inspiring Ethereum roadmap to ZK-ify the base layer to have ZKVM built

in to bring the magic of mathematics and cryptography to finance. So, the real benefit comes from using the chain. I think that there's been a stopgap because of lack of infrastructure and lack of technological improvement to actually use the chain to its fullest potential. The ironic part is Danny, my co-founder, said this is we've found that the biggest customers of decentralization, the biggest customers of the chain are ironically the institutions and not retail cuz retail is used to being guardrails. As institutions unlock the potential of what the chain can accomplish, individuals will too. That's the best thing is Ethereum scales like software.

Someone like a JPMorgan use Ethereum, someone that lives in a remote country can use Ethereum and they can have equal access and that's powerful. That's the end potential. It will not be a centralized intermediated guarded future. That's that's a dystopian future and Ethereum's potential is way bigger. I love that we're just going through all of the mental models right now and all of the narratives and all of the calculations and you know, everything that you read on Twitter or or in blogs or hear on podcasts. I'll just throw another one at you. We are here in Manhattan in the Empire State Building.

There was one certain idea that blockchains were like cities, right? That that there were different kind of jurisdictional requirements for different blockchain execution environments. At a certain point, Ethereum was interrelated to the Manhattan of the blockchain design, right? It it it was for the people who are working in this space, large capital managers, allocators. The The fees were more expensive than other kind of cheaper, faster chains, etc. >> the L1, right? And then there's roll-ups that maybe like different economic zones around Manhattan. Right. And so now we've kind of gone through the roll-up centric roadmap for several years. Kind of activity's coming back to the L1 in a in a stronger way. Still a lot of

activity on L2s. Is this Manhattan NYC kind of analogy, is that correct? Is Ethereum kind of like is the block space akin to the Manhattan lifestyle, culture, way of living? How do you kind of think about these blockchains as cities idea now? I still love it. I love analogies. I think I I think I And I'm a New York bull. I like What does New York do? Is it attracts innovation, it attracts hunger, it attracts a lot of very, very positive bullish thinking about the future. And then we export those ideas to the world. The world operates on the US financial infrastructure. And if the US wants to

keep that lead, which it will, it has to export stable coins, it has to adopt blockchain infrastructure. That's happening at the fastest pace I've ever seen, and it's not just governmental, it's institutional, too. So once again, Ethereum as being the New York is going to be able to export its culture of being neutral, of being decentralized. Ethereum didn't pick political sides. Ethereum didn't um didn't become biased. Ethereum kept its values this whole time. It's still the most decentralized. It's still the most and it's still scaling to be the biggest blockchain with a ZK future. It's still has a L2 centric roadmap institutions can plug into, which are flourishing. I think the Robinhood chain this year is going to be a spectacular success. So everything's hitting, and it's just like in New York,

everything hits, and people always love to call for the death in New York, and guess what? New York's [laughter] the best it's ever been, and Ethereum is also the best it's ever been. Yeah, I I um you know, you mentioned how the exports of the city, the exports of Ethereum, everything is starting to hit. Um we've also talked about the exports of crypto. We've also said how crypto as we know it is effectively dead. Crypto tends to refer to the altcoin complex, uh which we believe is, you know, primarily cooked is a lot of the infrastructure with no product market fit, but the exports of crypto, the stable coins, the the the blockchain itself, these, you know, digital assets, tokenization, these things are very much alive. Um and so I'm curious uh if you

tend to agree with this, and if so, how like what are the exports of our industry that institutions primarily resonate with? Is it the composability? Is it the liquidity effects? Is it lowering settlement times? What are the primary exports of our industry that resonate with institutions? I think the simplest way to put it is Ethereum brings new revenue upside, and it brings a lot of cost cuts. And there is no company in the entire world that doesn't want to do that. And it's very similar to AI. It's very Everyone needs to adopt AI ASAP, cuz it increases new revenue lines, and it cuts a lot of costs. Now throw in the money layer, which is Ethereum, and that coupled with AI means we're going to reshape how

every single business exists. Every business is going to need to and already has an AI strategy. Every business is building an Ethereum strategy. And so what does that bring? It bring Our exports are new innovation. Our exports are going to be new jobs. Our exports are going to be new types of products. And beneath the hood of all that are things like lower settlement times and fewer trust assumptions and using math instead of using uh manual spreadsheets. And we know I go through the list every day of operational processes that everyone around us in New York has to go through at the banks and asset managers. And Ethereum actually upgrades all of that. So it's a very positive sum technology. But I will say the other thing we're exporting and this is why I want to come back to I agree with your take that most all coins are are they

they suck liquidity out of the system and it's and there's been that's why we've been in a bear market for coins even though we've been in the biggest bull market ever secularly for blockchains and that's going to keep continuing. But, one of the exports from Ethereum is ETH the asset. Just like Bitcoin exports Bitcoin the asset as a store value. Coming back to it, we need to decouple ETH the asset. It's an excellent application. Vitalik actually called it one of the most important applications for Ethereum. Um that is the store value that we're going to export as a portfolio asset and all of the operational efficiencies and revenue that Ethereum unlocks.

And we're seeing that right now. So, that that's already here. Can you run down like maybe a top three or top five? Like you mentioned you're you're looking at the bank processes. I think people are hearing this. We've been talking a lot about this. You increase revenues, you lower your expenses. That's what every company wants in their bottom line. What are some of those processes that banks and asset managers are going through on a day-to-day basis that they can make more efficient using blockchain and Ethereum? Um Excel gets replaced, which is a very very big thing cuz Excel is the is the global database. This guy's got his clawbot going on.

>> [laughter] >> Excels don't talk to each other. I mean, having your data in one place, having your money and your assets in one place is the biggest unlock because people don't need it it reduces time from reconciling Excels. It sounds like a very small problem, but it actually causes errors. It causes a lot of money movement of fat fingers and that gets all reconciled with one real-time database, which is trustable and can hold valuable assets. And that's the important part is you need to be able to trust a system with high value assets. Right now, it was Excel because people trust it within their walled gardens.

Ethereum is the platform that actually can hold all this. So, that that's one. The second payments. I mean, people still send wires. It's it's mind-boggling and that's the first thing that's the first shoe to drop, and that's why you're seeing every bank is either registering their own stablecoin, working on consortium stablecoins, working on the stablecoin strategy. That's very very obvious. That's such an easy improvement. And the last thing is digitizing actual assets. So, I mean, everyone's not tokenizing stocks. That's excellent. Stocks already quite efficient, but now they can become 24/7, now they become digital, now a lot of the manual things that the DTC has to has to keep doing manually become automated. And so, yeah, the DTC and Nasdaq and ICE, they're all working on

tokenizing their stocks. And And what's What What is that going to do? That's going to cut their costs, that's going to cut their operational overhead, their back office, and it's going to increase revenue because they can start making their own DeFi protocols. They can start say, "You know what? Let's distribute stocks on AMMs and in lending protocols." And that's going to be revenue driver. So, like again, the tools are all here, and everything's ready, and now we're going to hit the adoption inflection point. Yeah. Yeah, I'd like to ask you what that looks like from kind of like investors' perspective, from a from evaluation perspective, thinking about the DeFi protocols and their respective assets.

They have tons of different models with regards to buybacks, revenues, burns, etc. But right now, I think the entire industry is thinking about running uh valuation kind of like thought processes on DeFi assets as they are now with crypto-only capital, digital asset capital only. So, like Bitcoin or wrapped Bitcoin, ETH, stables, you know, like the Aave, Chainlink, um etc. etc., right? Those are the assets that are in in Aave, in Morpho, in Sky, in in all of these kind of um asset managers on chains, lending protocols, etc.

What does the change in valuation methodology look like? And talk to us about the TAM opening when it's not just crypto assets on chains, when it's not just digital assets, but it's any and all tokenized assets. I think you've said you expect stable coins at 750 billion on chain as well as tokenized treasuries upwards of 50 billion as well. These are These are your words, not mine. I'm more bullish than you here, but I guess we're adjusting the you know Yeah, I'm higher than that. Keep going. >> [laughter] >> So, when those come on chain, what does that look like for not ETH asset and not Ethereum, but these DeFi assets? How do you think about they like their transformation?

I'm max bullish Aave and Morpho and Uniswap. This is the renaissance. I mean, they've been battle tested. They've sat and when I say Ethereum is the best place for business, that means for the DeFi applications, too. I'm not just saying that Wall Street comes in. Everything that's been built and battle tested, I mean, all these founders have been in the trenches um like like Stani and Hayden and everything and they've been building the most battle tested protocols in Ethereum. They're about to see the biggest revenue uplift they've ever had because the TAM, like you said, yeah, I I I I think I'm higher. I think stablecoin uh AUM's going to 5x on on Ethereum. I think tokenized assets going to 5x and so these are going to be hundreds of billions, if not trillions, of assets that are going to come to the chain and they're going to plug into

things like Aave and Morpho. Yeah, I mean, we see Apollo, BlackRock, right? They've already done it. I mean, uh BlackRock put Biddle on Uniswap. Apollo's working with Morpho. These are already happening. So, these DeFi valuations are going to go bonkers and and that's a good thing. I mean, that it just means that now by having more assets and more ways to create utility and show the use cases of blockchains. Oh, yeah, I'm a I'm DeFi got me into the system. DeFi got me into Ethereum and now is DeFi's inflection point. So, I I'm quite bullish DeFi.

>> Totally, man. And and same here, right? Like we started in 2020, it was it was DeFi summer and DeFi was very very very interesting, very very novel, very unique, very kind of wild west. Went through like a 2 to 3-year phase where it was kind of s- usurped by the L1 trade or the L2 trade and now it feels like it's right back. Um so I guess maybe a more difficult question here is is there a world where their DeFi protocol tokens can outpace the valuation of the underlying blockchain? Perhaps not Ethereum but uh other blockchains. Do you expect to see a valuation mismatch change where there's going to be the apps of the ecosystem rising above the underlying infra and L1s? I know that's kind of

like the hot thing to say right now but like realistically like is there a world where the Aave's, Morpho's, Guys, Serups, etc. etc. rise to higher valuations than the you know all L1s or L2s? Absolutely. I don't even think that's a controversial statement. I think that that's the most positive sum outcome is where the applications where you're seeing institutional adoption and hundreds of billions if not trillions of assets at the end of the day flowing through they should capture a lot of value. And and the app layer is really important. A blockchain is nothing without its applications. A blockchain is nothing without its assets and a blockchain is nothing without its security and decentralization. And so yeah, obviously I think Ethereum benefits from all of this and again, Ethereum is bigger than

just a platform. It's infrastructure and ETH is an asset store value. So let's let's move that aside but every single one of these DeFi tokens now that they're hitting their institutional moment too, I mean again, Stani went through the trenches and the SEC came knocking on his door. SEC came knocking on Uniswap's door. All of that is now behind us. Yeah, these these DeFi tokens I I think are set up for re-rating in a very very large way and they're going to capture huge market share and I'm glad that we have so much so much so many applications and so much present built on Ethereum. It's good for ETH but the app layer should flourish. The app layer should fly and it should outperform anything else that doesn't have as much product market fit and utility as DeFi has today. What do you think Ethereum can be doing better?

Great question. My my my There we go. >> Yeah, yeah, you you stumped me for one because it's it's it's been a lot of years of um It's it's been a tough few years for Eth the asset and people love to look at Ethereum as as the dinosaur and now Ethereum's value is finally showing itself. So, it's one of those moments I'm like, is this finally the inflection point to be like max bullish? But what could it be doing better? Um continuing to be top of mind share for new young developers, continuing to say that this is the coolest place to build. Um I focus a lot on finance and financial applications. I've been in New York 15

years. I worked on Wall Street for 12. So, I mean, I know the product market fit when I see it there and it's very exciting to me. But Ethereum is bigger than just finance. So, the AI ecosystem, Ethereum needs to win that. I mean, it's it's that that's a must win and Ethereum is Yeah. the most useful platform to have money and high-value assets in. So, when you ask all the agents where you're going to transact, they actually say they'll output Ethereum. We need to keep it that way. People building new applications, that needs to come to Ethereum. Ethereum is It needs to be cool rather than boring. Uh it can't be branded like IBM, it has to branded like Apple. So, that's what it can That's what it can do better and we're all going to help drive it.

But um but it's important. It's important to keep inspiring new talent and I want innovation. When people think of innovation, I want them to think of AI and I want them to think of Ethereum. Yeah. Something that you spoke about earlier was Tom Lee and Bitmain being this kind of like institutional buyer. Like looking holistically at the at the dapp landscape, you've really got Sailor, Tom Lee, and the rest. Uh obviously Sharklink, Joe doing great work. Those guys are crushing. There's There's a couple other solid Eth dapps, but there's been some stuff happened.

EthZilla, Peter Thiel left and it was kind of weird. There was a uh a Bitcoin guy, Joseph Bailey, I think did some interesting cross entity absorption. I just don't know where this goes. What's your honest opinion on Bitmain and how the stock trades, how how the company's being ran. Where does this go for all the ETH holders who are constantly seeing Tom Lee out there buying buying buying buying? Like are we Is this our sailor? Is this something that that we should be fully backing publicly being strong about careful about? What's your take on the DAT landscape? Yeah, so the power law played out. Just like any innovative wave, you see a huge wave and and

there's a mania and then and then there's a quick reckoning and there's a few that rise to the top and that played out very very quickly for the DATs, but that's also it's healthy. It's healthy to have a reset and have sustainable growth. Tom Lee has been buying a hundred million dollars of ETH for several weeks for a long time. He is he is the sailor equivalent and and he has an excellent voice and he knows the value proposition and he's a champion for ETH and I think we should all be behind him because he knows the value. He knows where this is going and he thinks in exponentials. He's the one who says this is this must be the stable coin chain, so maybe I should buy like that's that's what you needed. There are a lot of other there's a lot of other

good firepower in the space though like Lubin and Shapelink and and Andrew Keys is going to go live soon. So I mean these are these are heavyweights. These are OGs and what they're going to do is they're going to help amplify the value of ETH to institutions and that's why I think ETH is going to become a core holding for institutions. So like going back to your question, it's never evading a question. going to grow on Ethereum a lot. Transaction's going to go up a lot, but ETH is re-rating to become an institutional asset and that's a lot of that's because of Tom Lee and the other DATs, but yeah, it's going to be a few of ETH people and it's sailor for Bitcoin and that's excellent. So one thing that Rob says a lot and and that we think about is that have these DATs

not just created a dilutive force on the market such that if I want to get exposure to ETH, I can buy S bet, Bitmain, the ETH E, any of the ETH ETFs, I can go on Kraken, Coinbase, etc., buy ETH there, or I can go on Uniswap on chain and actually buy on chain. How do you think about whether these DApps are dilutive to the buying pressure from retail on ETH? Is it a a dilution or is it all kind of the same at the end of the day? Such that like there's more than 120 million ETH or whatever it is, or there's more than 21 Bitcoin cuz there's all these like derivatives that you can buy. I- is that the right way to think about it or or is that just wrong? I don't I don't think so because all of it re- leads back to

buying spot ETH. So, I mean, buying Bitmain just means that Bitmain or buying Bitmain stock means they're going to go have more MNAV to go buy more ETH with. So, it just depends on the vehicle. And this goes back to your earlier question. The people that will value ETH natively on chain, ironically, are the biggest customers of decentralization. It's the institutions. It's where can they hold assets in in a trustless manner that can't be censored, which is their own collateral? That's ETH. Retail wants wrappers. Retail wants different ways of accessing. And good part is the Ethereum ecosystem has given every single menu.

Like you said, you can buy ETH on Uniswap natively. Great. Maybe that ends up being the institutional case. Retail wants to own ETH in their 401K. Fine, then do ETH out of the the BlackRock ETF or do Bitmain and get some levered exposure to ETH. But all of this is accretive. I'm very positive. So, I don't think it's dilutive at all. I think it creates more buying pressure, more buying sources, and I think it's I think it's ultimately very good. What are the two or three things that you're most excited about within the Ethereum ecosystem this year? Clarity Act comes to mind.

Um, you know, there's tokenization. Like I mentioned, BlackRock wants to tokenize all their ETFs this year. Um, is there like one or two things that really pique your interest? Yeah um it was cool. It was last summer about this or about this time last summer I was testifying in Congress about the Clarity Act and and now it's coming to fruition. So, that'll be that'll be excellent for unleashing innovation beyond if you like I want Ethereum to win, but I want all the applications on Ethereum. I want all the tokens on Ethereum to win, too. And that will give clarity for lack of better term about how those tokens can be treated. The good part is the CFTC is getting very vocal about how to classify tokens. The SEC has been super super um uh supportive. So, we're going to see a lot of innovation anyway, but Clarity Act

will put it into law. So, that's it's very very important. Just like stablecoin The GENIUS Act legitimized stablecoins and now a year later we're going to see the inflection point. The Clarity Act will unleash tokenization and you can't put that genie back in the bottle. And so, it is important to get these things into law. That's the first thing. And the second thing is I'm just excited for us to see our exponential inflection point, which people have been waiting for for a very long time. It's been it's been a tough few years of of waiting for adoption, waiting like we've all been driving towards here. So, I'm waiting for stablecoin TVL to be a trillion plus. I'm waiting for RWA TVL to be a trillion plus. And that's when we find product market fit.

And yeah, I'm just excited that for all this time people thought I was crazy for a while, but I'm excited that I think Ethereum is going to be the backbone of the financial system and that's going to get solidified this year. On on clarity, Andy and I are going to the DC Blockchain Summit next week. We're going to be live streaming from the conference, speaking to a bunch of senators and politicians. We've had Hester Peirce on the show. Hope to see her out you know, out there again. We'll we'll have some CFTC people on as well. Like are there questions What what questions should we be asking? Like what do you want to hear, right? Like you know, if you're not going to DC like you know, what what do you think the the industry needs to know or should be talking more about? We'll we'll we'll be

there to ask those questions. I think we have the most open, but also the most responsible regulatory um, window that we've ever had and maybe maybe we'll have for a while. So, I think now we're supposed to push as much responsible innovation, but be on the frontier as much as possible. What does that mean? Let's ask them what is helpful to innovate in America. One example is privacy. So, I believe very firmly that blockchain systems at the base layer has to be open, just like the internet's open, but you can build privacy layers on top.

What is the SEC, FTC think about ZK? We talked to them about it a lot. They're they're excited. Tail you out, but how do we incorporate How do we be on the frontier of ZK? How do we not lose the the technological race and let ZK go elsewhere before we embrace it? What kind of um, systems can we adopt for identity, for privacy, for data privacy, etc. and and how and linking all that to blockchain? So, the frontier of ZK, Ethereum has always led on that. Ethereum's been a but we should continue to push the push the boundaries on it. And the second thing is, how do we responsibly integrate all these institutional assets that we're bringing and have them be distributable to to retail? Like the the real potential of blockchains, it would be a little sad if it just be end up being institution

institution. There is no open benefit. Then then what's the point of Ethereum at the end of the day? We want to responsibly be able to take assets that only Wall Street's had access to and give Main Street access to those two in the right responsible way with the right disclosures, but make it all programmatic. So, how can we think about innovating in that future? That's that's I think the win that everyone wants to see. Everyone wants more distribution. Everyone wants more asset velocity. Um, blockchains enable that. Let's work with regulators and figure out the right rules for it and bring the right technology. And I think again, ZK and privacy should be a big part of that conversation.

Definitely. Incredible. Yeah, I mean, I think everyone's excited about the ZK aspect of the Ethereum roadmap. It it feels like this technology has been so aggressively invested into, built out, built out and it's kind of adjacent to blockchain and crypto as an you know, as it exists, but but but it's so perfectly tied in, right? It's so it's such a nice kind of holy matrimony there. More more on the on the kind of regulatory clarity front, I'm viewing clarity as like this line in the sand in this current bear market as well as in the current structure of regulation.

People are saying that we really want to get this done before the midterms and obviously we want to have firm regulation done uh prior to the next actual election of of the president. There was a big standoff though between Brian Armstrong and the broader regulatory uh you know, House of Representatives, SEC, CFTC, and it seemed like he stood his ground because he did not want to budge on the stablecoin yield part of the uh kind of of the bill, which was probably because of his private interest, but also because you want to think because of the public interest of the entire industry. There was a lot of controversy there. Bitcoin went to 97k at that point and then dropped all the

way down to 66 once the once the once the market realized that that this wasn't going to happen. What's your take on Brian Armstrong's position in DC? How much of an influence do you think he really has and is Does he have too much power? So, first off, I don't think Bitcoin's crash was due to the Clarity Act not passing. I think we're just in a macro a weird macro liquidity spot, which is all going to resolve soon for the next cycle. >> Soon. >> So, so No, it is soon because the money printer always There's always a money printer. That's like one of the things that will always be true in monetary policy. There's always been a money printer and that's going to that's going to come to life soon. I mean, it's uh so,

take that aside. Take the price aside. I think Brian Armstrong and Coinbase have been some of the the most important proponents of driving responsible regulation and innovation for crypto for the last 10 15 years. I think we all owe them a lot and I think he is thinking bigger than just Coinbase. I think he's thinking about the future of the space. So, I think everything Coinbase does Coinbase was the lone party fighting the Gensler SEC, and they're the only ones that that were that stepped up and fought back, and we all owe them for that. So, um I don't want to comment on on whether Coinbase and Brian's stance is right or wrong. I think they're all going for the most positive sum outcome.

I think the point to hammer home is the Clarity Act's important. The Clarity Act gives encodes into law how tokens are treated, but stablecoins are already in law, and what does stablecoins being in law do? It makes public blockchains put into law. So, we're in a good spot. I mean, I don't want to say that if the Clarity Act doesn't pass, we're it's it's it's all roses, but we're going to be fine. Uh I don't think you can put stablecoins back in the box. Too many institutions, too many every fintech company, everyone's integrating them. That it's like undoing email. Like no one's going to go from email back to to sending paper mail. No one's going to go from stablecoins back to back to physical dollars. Um that adoption moment's happening. It'd be nice to have Clarity Act to pull to pour fuel on the fire for more types of DeFi

tokens, but tokenization tokenization's happening regardless. Stablecoins are happening regardless. Public blockchain adoption's happening regardless. Ethereum's now irreversible, and um I'm quite happy about that. Love it. Yeah. Um last thing from my side on the ethereal size on the etherealize side, what's the state of affairs now? What what are you guys doing? What's the conversations look like? How has the kind of pendulum been swinging from your internal operations from uh you know, ETH was at 5K, now it's at 2K. The the adoption is flying. There's been a lot of developments on the tech side. Like how do those conversations look, and kind of what's the state of affairs on institutional interest in public

blockchains in Ethereum, um and what are you doing to kind of push this forward? Right. We're the busiest we've ever been. It's the most intense in the good way, period we've ever had. It's the most amount of inbounds I used to have to make outbounds about Ethereum. Now it's all inbounds saying, "We need this. We need this. Teach us about this." It's goes from things like presenting Ethereum to a bunch of Hong Kong regulators to following up on the regulatory front in the US to to doing institutional tours all around Wall Street all day and running around in a suit. So, you guys are wearing suits, too. It's it's the best it's ever been. And so, honestly, I haven't noticed the price drop from 5K to 2K for institutional

adoption. I've obviously felt it in my wallet, but um but I think that'll come back. I think um it's it I have the most conviction I've ever had, but it's cuz we see all the data points. We see what's happening. And we've been building. There's so much infrastructure that needs to be built. The ZK frontier, we're making a big bet that that's the future of privacy. I think that there are other chains that are choosing not to use ZK, and we're choosing that Ethereum's going to be all ZK enabled, and it's like betting against AI. Do you really want to bet against ZK? That's a It's a So, so we're making some big bets. We're making some big technological pushes, but we're building infrastructure to help accelerate. I want more tokenized assets on Ethereum. I want more stable coins on Ethereum. We're going to Whatever

doesn't exist, we'll build it. And and we have the most amount of adoption we've ever seen. Incredible. Joe Vec, thanks so much for coming on, man. Absolute pleasure. We got a can of bear spray here for all these Ethereum bears. >> [laughter] >> I think you'll love that one. >> Ethereum bears, we have we have this when they enter the office. That's amazing. I don't think we need this in New York. No, no. I think you're right. I think I think I think we're >> [laughter] >> No bears here. No bears here. That's incredible. No, thank you for having me. I love this new office. I'm so happy you're in New York in the capital of of the world and the capital of Ethereum shortly. Absolutely, man. Well, thanks so much. This is it.

>> Ladies and gentlemen, that wraps us up. That wraps us up for today on Bull & Bear TV. Episode number 23, guys. Thank you for tuning in. Tomorrow, live from the Tokenization Tower and the >> State Building. See you guys.