The Bull Case For Ethereum | Tom Dunleavy & Ryan Berckmans

The world is ready to come on-chain. The gold rush has started. It's consumer, it's institutional, it's global, and it's not okay for Ethereum to, you know, operate in its ivory tower, its kind of university anymore. We got to open the doors and build connections, and that's what's happening now, and I think that that's our big opportunity.

This episode is brought to you by zkSync. Join the Elastic Network today at zkSync.io/empire. Thanks to zkSync for making today's episode possible. I wanted to take a moment to tell you about Focal by FalconX, the AI-powered insights engine built for institutional crypto. By leveraging AI, Focal empowers institutional investors to streamline research, anticipate market shifts, and make sharper investment decisions. You'll hear more about Focal later in the show. Hey guys, Jason Yanowitz here. Just to let you know, we have Permissionless 4 coming up in June from the 24th to the 26th at Industry City in Brooklyn. This is a conference for the developers and builders where we'll be focusing on the DeFi Renaissance, applications, token design, and much more. Click the link in the show notes to grab your ticket today and use code EMPIRE10 for 10% off. All right, everyone.

Yeah, are you nervous? Like, I could do this too. Like, I know it's been a while, you've been rusty.

I can jump in here if you want. All right, everyone, welcome back. We got the smiles going. We got a good episode coming. ETH just had a nice God candle. So obviously, you know, we have to do— we're doing a bull case for Ethereum podcast. We got two of the best people to do that. We got Tom Dunleavy, who is head of venture at Varius Capital, and we got Ryan Berkman, who is an ETH OG, community member, ETH investor, and has some, some good takes on the timeline that I've been reading and enjoying. So, Ryan, Tom, welcome to Empire.

Thanks for having us.

Thanks, man.

Yeah.

All right. So I think we can't talk about— so obviously ETH is going through this pivot, and we'll talk about that, and we'll talk about what it means for the L2s and the future of ETH and ETH price and how to value ETH and all that kind of good stuff. But I think actually maybe the best place to start this conversation is what went wrong for Ethereum and ETH over the past few years and just kind of address kind of the criticism head-on. And maybe Tom or Ryan, whoever wants to take this, like, what are the things— there's the Ethereum pivot and all this kind of stuff. What are the things that we, I guess, maybe talking colloquially about Ethereum, are trying to address here? What are the problems for Ethereum? What went wrong over the past couple of years?

Yeah, yeah, I'm happy to take that. So Ethereum has had an incredible strategy for the last 4 or 5 years, which is the so-called roll-up-centric roadmap, which is really more of a hub-and-spokes model of L1 plus L2 scaling. And there were some significant growing pains in bringing this model to maturity. And what we saw was sort of this layer cake of issues around both a set of unforced errors from within the Ethereum community around narrative communication and starting crucial initiatives like interop and L1 business development a little late in the game. For example, Etherealize, very exciting business development group run by Vivek, Danny, Zach, and Grant. Great team. They're out there crushing it. You know, they started really just this year operating in earnest. So there were some things that could have happened earlier. And then the L1 plus L2 model itself is complicated. And it took some time to get all those pieces firing on all cylinders. And now we're seeing incredible success stories like WorldChain L2 has over 12 million verified humans now. Base is growing. Coinbase's L2 Base is growing like an absolute, just unstoppable force of nature. It's wild. And then also Robinhood just recently bought a Canadian company whose own Ethereum L2 has launched today, actually, a couple few hours ago.

Wonderful. So I think the counter that folks would say is, look, Yeah, Base is doing phenomenally phenomenal, and WorldChain is doing great. And, you know, Robinhood might launch an L2 or just acquired this company who has an ETH L2. However, that has not actually helped Ethereum or ETH, the asset, right? You know, I think a lot of us were— all four of us were in the industry back in 2017, I think. And, you know, if you bought Ethereum in 2017, it's the same price that Ethereum was a couple of months ago. So Tom, how do you think about that?

Let's think about the framework here. So I entered the industry in 2021, and the thing that excited me as a traditional finance investor was doing really stupid analysis on ETH revenues, growth rates, and I think that's exactly the wrong way to think about L1s. All of the transaction fees, all the execution fees, all the other individual fees up and down the stack are effectively going to zero, and Solana showcased this. Even if we think about the one area that may not, MEV, as we have faster block times on these chains, if we have lower latency, the opportunity for MEV actually goes even closer to zero. So then you get down to these chains effectively have no fees. So how do you do some sort of DCF or some revenue multiple or whatever? And I think we have to think about this sort of next order effect and kind of what these chains actually build and have open the opportunity for. So the way I like to think about L1s is effectively how much value are they securing on the underlying base chain? And for Ethereum, that's become fragmented across L1s and L2s. But should that really matter if ETH is the native base asset we're all settling to, right? So if Ethereum in aggregate is securing a trillion dollars in the future, Ethereum, because of its attack vectors and the opportunity to attack that $1 trillion has to be worth some order of magnitude close to that, right? So today, that order of magnitude has been 2 to 3x versus what the base value is on the TVL. I think in the future, it's going to grow precipitously. And unfortunately—

Tom, you're saying ETH, the asset, the market cap of ETH will be correlated to the total value that the chain is securing?

Correct. So we're securing something like $70 billion in stablecoins today. Stablecoins added on top of that is closer to $200 billion on ETH. ETH in terms of market cap, $3,000, $3,500, something like that. So if you are actively securing that amount of value, the asset needs to be worth higher than that to actually secure that as an attack vector, right? It's going to be hard to secure a huge amount of Ethereum to attack it, but theoretically you could do that. So there's 150— sorry, 250 trillion assets in the world today. If we assume Ethereum as the most, you know, censorship-resistant chain that's never gone down, assumes even some 1, 2, 3, 4, 5% of that, you can see a pretty high multiple of where we are today in terms of market cap versus, you know, where we've been in the past. And that's how I like to think about these things because, you know, at the end of the day, again, all of these fees are going to compress to zero. So then what do we value these assets on?

Yeah.

Okay. So, so we'll touch on the valuation side in a second. I want to come back to this. Well, Ryan was mentioning with the rollup-centric roadmap, and I'm curious if you guys would say the rollup-centric roadmap was a sick— this— the timeline at which they built the rollup-centric roadmap was this was the right decision or not. There's actually Onsgar at the Ethereum Foundation. I heard him— the two quotes from Onsgar at the EF who said A, Ethereum has rejected growth, and B, Ethereum built for 10 years out, not today. And I think the idea there is that maybe the right model wasn't building for this roll-up-centric— maybe roll-up-centric future is 10 years out, and that's in 2035. But really, we should have just been making Ethereum the L1 better and faster over the last couple of years instead of optimizing for all these L2s. Ryan, I'm curious what you think about that.

It's really the confidence in these platforms that drives valuation. 99.999— however many 9% of Bitcoin activity happens on centralized exchanges. Do we refer to Bitcoin as having an exchange-centric roadmap? And so, when you think about, did Ethereum start the L2-centric roadmap early? No, it didn't. We started it at exactly the right time. And the issue was that there were key supporting activities that would have rounded out the whole picture. You know, you're going to the restaurant, they make you the best steak you've ever had in your life. But if the, the room you're sitting in is, is dirty, or they give you this nasty glass of water, you know, or, or the wine is sour, it just detracts from the whole meal. And Ethereum started the roll-up-centric, L2-centric roadmap, you know, the L1 plus L2 hub and spokes model at exactly the right time. But these, these key supporting activities of interop, and attention to UX across all of Ethereum, and attention to the network of L2s, that they're greater than the sum of their parts, and L1 business development, and even just at a basic level narrative, helping the community to align on what we're actually doing and why we're doing it, so that there's not this void that everyone's arguing about, you know, why do L2s exist, will there be DeFi on the L1, are we? You know, there was a very famous Ethereum person who famously said, get off the L1, you know, leave the L1. And it's not, uh, that's actually not how it's supposed to work. It's really supposed to be L1 plus L2, not L1, you know, or L2 in some kind of blood dome. And so I think what we're seeing now is a greater attention to the detail of the holistic Ethereum economy across all the layers. And that, that affects both the technical roadmap in terms of interop and L1 scaling plus L2 scaling, uh, and it also affects the narrative in terms of how we think about why Ethereum did these things and what it means for the world. So no, I don't think that the, the L2, the L2 roadmap was started too late. I think it was started exactly the right time, and now we're really starting to see these investments pay off, including because we're kind of rescinding and fixing these unforced errors around narrative and interop.

Ryan, I want to ask one more question. Then, Santi, I want you to jump in as well. You mentioned the restaurant that you go to with steak and stuff like that. What is the product that Ethereum is selling? Because I think I could— there's one argument maybe that I would lay out that says there are 3 products that Ethereum sells. It sells Ethereum, the asset ETH. It sells block space, like execution, and it sells blob space, right? And DA for, for the L2s. How do you think about the, the product that Ethereum is selling?

Yeah, so if you're at the gym and, uh, you have your iPhone, or maybe, maybe it's 20 years ago and Steve Jobs just announced a thousand songs in your pocket, you buy your first iPod, you know, you've been going to the gym 5 days a week for most of your career, and, and, you know, all of a sudden your, your gym experience has just been turbocharged. You, you have 1,000 songs, you can— it gives you peace, it gives you happiness, it kind of fills your soul. So is Steve Jobs selling— is he selling that feeling? Is he selling that experience? Is he selling 1,000 songs in your pocket or is he selling, you know, kind of the silicon and metal in the iPod? Right. And in Ethereum, Ether, the asset, block space and blobs are the raw materials. That's our beef and potatoes and kind of the McDonald's analogy, you know, but Ethereum doesn't sell block space and blobs. Space. You know, it doesn't, it doesn't sell L2s or, or anything technical. What Ethereum sells is freedom and global prosperity by giving folks self-sovereign access to the global economic hub. And it's going to be that, that Ethereum economy across all the L2s and L1 of trust-minimized bridging and L2s offering organizations like, like, you know, Coinbase, Robinhood, the city of Buenos Aires, the the control and customization to come on-chain on their own terms while remaining interoperable with the broader, you know, distribution of the global, the global economic hub. It's going to be that overall value prop that really drives the, the, again, like the whole being greater than the sum of the parts. And so that's what Ethereum sells. Ethereum sells the opportunity to take all of our economic systems and level them up in a way that is risk minimized and, and free. And that's really the value prop that's driving all this institutional adoption and the kind of growth we're seeing this season.

Yeah, yeah. Just to add to that briefly, I think that was very well said. Speed is a commodity. If we're competing on speed, centralized servers will always win, right? We've had high-frequency trading that is traded at sub-milliseconds for over a decade now, and we're just at 200-300 milliseconds on the fastest blockchains. So what The commodity that we have is censorship resistance, distributed world ledgers, and that's it. Ethereum has proved they're the most secure over time. Now, can they be usurped? Because the important part here is, to a lot of the points you mentioned, Ryan, is there are other chains who are trying to fight for exactly the same thing. That sovereignty and that history is immensely important to folks who are bringing assets on-chain, particularly folks from traditional finance who are going to drive TVL and other things going forward.

Tom, how do you— okay, so let's get into the pivot, the ETH pivot, which is basically scale the L1, scale the blobs, improve the UX, scale by— like right now, scale by increasing block size, not the block times, and then maybe we get block times later on. What do you guys think about this pivot?

Yeah, so the ETH pivot it was more of a pivot at the social layer than the technical roadmap layer. You can look at these very complicated and perhaps poorly, poorly narrated diagrams that Vitalik has published year over year where he shows, he said, all right, here's the plan. That plan really speaks to experts. It's more of an internal-facing plan. It doesn't explain why we're doing it or what the expectation is. And if you drill into the details of these tech plans, it was always the plan to scale the L1. But the reason that it's mostly correct to characterize the last few months of Ethereum community as a pivot is because Vitalik gave a talk in Taipei a couple of months ago where he said the L1, to paraphrase, is not just a security vending machine. It's not just selling the L2 security and then washing its hands and stepping clear of that arm's length security relationship. He said the L1 is a broad spectrum hub. It provides bridging, governance, liquidity, escape hatches, and much, much more over time. And so he said that we have to think of it as not just only L2s and L1 providing security in the background. It's going to be both. And the community loved this talk. And a famous community member who's highly regarded sort of took that and, you know, there's Liam, and he said, hey, the L1 is really the economic headquarters, is the economic HQ. And that galvanized and aligned the community around this idea that it's not the roll-up-centric roadmap. We never should have called it that. It's the L1 plus L2 roadmap. It's both. And so the pivot was almost more in our hearts and minds than it was at the technical level. And then after everybody really fully appreciated that the L1 is this headquarters that needs investment, you know, and attention across the stack, including in business development, that's what really started the focus on, all right, so if the L1's the HQ, we can't scale that. We can't just scale the L1 5, 10 years from now. We got to be doing it now. And so it's that social layer pivot that helped to kind of reprioritize some of these technical items that were always planned.

Yeah, so I don't want to gloss over the problems. I think, Brian, a lot of the things you said are really important, but there was a dramatic pivot, and I think it was really important that that pivot happened because we were focusing on the L2s, which if we look today, 80% of the volume on Ethereum is on base. So that is effectively capturing all of that L2-centric volume. And then you have all these other assets that are, people like to say, vampiring ETH, but every dollar that goes into Arbitrum or Optimism or zkSync or whatever is a dollar that is not going into Ethereum. So, you know—

And Tom, sorry, before you get into it, why is that a problem in your mind?

There are only so many dollars in crypto today. And the reality is we're doing a lot of PvP trading. So, you could say, hey, ETFs are coming, great, you know, institutional adoption will come through, you know, folks who are investing in the ecosystem, then want to invest in the asset ETH, or, you know, I want to bet on ETH as a tech play as a native investor, whatever. But the reality is today, there's only so much capital to go around. Capital is buying other Ethereum-related assets that are not ETH. They're not buying the native asset Ethereum, not building the blockchain security, and not helping the ecosystem move forward. So I put out a pretty controversial point a few weeks ago, and I said, honestly, all L2s should retire their tokens because today they're not really serving any purpose. If 80% of the volume is on Base, Base does not have a token. The purpose of L2s today, to me, is for customization. So if you're going to have these customized L2s, Fantastic. You can do whatever you want on them. You know, Sati is doing a great thing on Avalanche, doing his own customized, you know, chain there. So like you can do all of these things, but then you settle back on the credibly neutral layer of Ethereum and you should pay a tax for that in Ethereum.

This episode is brought to you by zkSync. In 2024, zkSync took a step toward a multi-chain future by transforming from a single L2 into an ever-expanding network of ZK chains, the Elastic Network. To onboard the whole world into crypto, many specialized chains must be able to coexist, work together, and share liquidity. Institutions and global financial leaders choose ZKSync for unmatched security, scalable infrastructure, better onboarding, gasless transactions, and privacy-first design. Join over 20 chains including Abstract, Sofon, and Kronos in the Elastic Network today. Behind zkSync is the zkStack. It is a one-stop platform for building private blockchains on Ethereum. The stack solves all the typical privacy, regulatory, user experience, and deployment concerns of blockchain without compromising performance or security. Join the Elastic Network today at zkSync.io/empire. Thanks to zkSync for making today's episode possible. I wanted to take a moment to tell you about today's sponsor, ZenRock, the permissionless decentralized custody network backed by one roundtable partners, 10T, Maven 11, and Spartan. Now available on Jupyter, ROCK is the native token for transactions within the ZenRock ecosystem and secures ZenRock's decentralized custody network. The first application launching on ZenRock is ZenBTC, yield-bearing Bitcoin on Solana. ZenBTC will be live in April 2025. To find out more, you can follow ZenRock on X or click the link in the show notes.

Where I think we need more research in crypto is how do we effectively tax? How do you price that? What is the appropriate tax for using this security? Uh, like a security— Ryan, to your point, yeah, like security is really important. Ethereum has by far the most robust security out there. Um, and that, that's valuable. The question is, how do you appropriately price that? Like, how do you price block space? How do you tax economic security? How do you rent it out? Like, I know it's like a very broad question, but I'm curious, like, to me that feels like the ongoing tension. And by the way, I'm not suggesting we're ever going to fix that, but I do think that like, that's where a lot of the perhaps mistakes or just realizations have come about where I think about the L1, L2 roadmap. I agree with your point, Tom, around customization. Super powerful. Um, where a lot of the nuance comes is like, hey, are L2s bringing enough value back to Ethereum? ETH as a substrate for economic security is— Cosmos had the same issue, right? And Avalanche and other ecosystems have this issue. Of course, like, like a monolithic ecosystem like Solana doesn't have this issue as much. But I am curious how you think about, A, is it fair to say this? Do you believe that this incredible tension, and how do we think about optimizing that tax, so to speak, that you talk about, Tom?

Yeah, I think this is the million-dollar question. How do you actually price block space effectively and how do you charge a tax for it? This is going to, how do I effectively look at whether I want to pay that tax on Celestia do I want to pay it on Ethereum, or do I want to pay it on Solana? And I, I think the only way that you can look at it today is where my assets can have more velocity, so be used within that ecosystem more effectively. And then what are the native security benefits I could have from settling on your blockchain versus others? And in terms of pricing that, it's somewhat unknowable, which is the challenge here. And Folks have railed against monetary premium and other ways to kind of value these assets, but I think they're inherently important because all these things are not going to be based on a direct cash flow number or direct multiple of some number. They're slightly unknowable and they're very much based on the opportunities that you have versus other chains.

I think one of the most impressive things about the Ethereum ecosystem is the ability to coordinate. Like the migration from proof of work to proof of stake, and now the Pectoral upgrade is like, I think one of the most amazing things about Ethereum and what makes Ethereum great. Um, I'm curious, like a lot of the commentary recently has been, look, Ethereum finally got its act together. We, we hear that a lot recently, which is they've sort of like now feel a sense of urgency and it's like new energy coming into the Ethereum ecosystem. Obviously last year you have, you've always had like ConsenSys and other factions within the Ethereum ecosystem, but maybe Ryan, more of a question for you, like walk us through like from your vantage point, like how, how are the, is it fair to say that there are competing factions and interests within the Ethereum ecosystem? What do you see as the biggest challenge for future, like prioritizations of the roadmap and getting everyone aligned both at the L1, at the L2, like how do you How do you think about all of that?

Yeah, no, such a great question. Uh, it's fair to say there was a low-grade civil war in Ethereum over the last 18 months, and it had been brewing for several years. And, uh, you know, I think, I think it was ultimately uglier on the inside than a lot of what was shown, uh, through public channels. And, uh, you know, when I say the inside, I mean the, you know, the loose federation of— because it's decentralized even on the inside, right? There's not like you know, a single, single place or a single, single watering hole. And the greatest challenge for coordination in the Ethereum community was just to agree what we're doing here at a 60,000-foot view. There was such stark disagreement over why we were doing L2s and if L2s were a good idea at all. And what the expectation is for L1 versus L2 interplay and that relationship. And that, you know, to Tom's point, where do the dollars flow? Why do they flow there? Who is that good for? What's the value accrual story? And so for me, seeing consensus, social consensus develop around these topics, you know, that, that, that what we're, what we're doing here is providing an overall economy with many disparate participants that can kind of choose their own adventure, and that value accrual will happen, yes, through fees in the long term, but especially through confidence in the long term. Ultimately, the reason why Ethereum suffered in price action is because people lost confidence in it. They felt like Ethereum, both the L1 and Ethereum writ large, was not going to be a big slice of the future. They there was this sense that it was this sort of dinosaur that had had its moment and that these newer competitors were coming to do a better job and eat the lunch. And, and, you know, that has never been the case in my view, but it has been closest to being the case over approximately, you know, I would say ending about 3 months ago, going back a year and a half because there just wasn't a lot of recognition in certain parts of the Ethereum political diversity that recognized, you know, there wasn't a recognition of the actual problems, you know, the lack of alignment around strategy, the lack of narrative, cohesive narrative, the lack of business development, and ultimately the lack of getting out in the real world and meeting our customers where they're at because the world is changing. And there was this great early period in Ethereum where we got to be a community of mad scientists. And but the world came knocking at the door. The world is ready to come on-chain. The gold rush has started. It's consumer, it's institutional, it's global. And it's not okay for Ethereum to just, you know, operate in its ivory tower. It's kind of university anymore. We got to open the doors and build connections. And that's what's happening now. And I think that that's our big opportunity.

I think we forget these are effectively early-stage startups that went live pre-product, pre-revenue, all that stuff. And one of the most important components of a startup is business development. And you need that to actually grow what you're trying to do. So I was in DC a few weeks ago chatting, and I was meeting with a big policymaking organization. And one of the big things they were talking about was, hey, we have representatives here from Stellar and Polkadot and all these other chains, Cardano, across the board. And I was like, oh, what about Ethereum? Have you guys met with anyone? And they said, well, I don't know who to meet with, right? So now you have Etherealize and the EF more coordinated. So maybe there's a chance there. But if you don't have an effective advocate or an advocating body, you're going to fall behind. And you're trying to fight for customers, so you need business development, which I, you know, I think this quote-unquote pivot is, is a huge, um, that's a huge part of it.

Absolutely, Tom. And a few years back, I traveled to Wyoming in a personal capacity, just as an independent community member, because Wyoming Stable Token Commission had announced that they were beginning the bid process for the, uh, technology provider for the world's first state-backed stablecoin. And I was like the only Ethereum person in the state, you know, who was really like plugged in. I couldn't believe it. Meanwhile, there are all these other organizations that sent professional representatives to these meetings. And so for me, that was a bit of a wake-up moment where you realize, wow, what is Ethereum doing that we have all this great work going on, but it's nobody's job to go and speak with Wyoming and say, hey, you should choose Ethereum. Here's why you should choose Ethereum.

Yeah.

So that's fixed now.

Do you guys think that— so there's two big, like, people changes that have happened. We have Etherealize, which is essentially the, like, what, go-to-market team for Ethereum now. And then you— I don't know if that's the right description, but then you also have a lot of changes at the EF, like old people out, new people in, new leadership, obviously. Do you think Is that the perfect plan? Like, do we, do we think that like, all right, new people at the EF combined with Etherealize is the solution?

Absolutely. And we need 10 times more Etherealizes. We need, uh, you know, business development and grassroots talent cultivation all across the world. There needs to be a more scalable kind of human capital strategy on the go-to-market front. And Etherealize is certainly one of the keystones of that. But Ethereum is a decentralized community and Etherealize will, uh, be, while very important and, and doing it like crushing it, they're going to be one of many efforts to bring Ethereum to the world.

Tom, do you like the strategy?

Um, it's better.

It's better than it was because compare this to like, uh, maybe the Solana's BD arm, which is, you know, we've had folks like, uh, Ben Spring— I guess Ben's no longer there, but Ben and, uh, yeah, I mean, they have a phenomenal BD arm which has done a lot for them. Avalanche, obviously, Morgan and John and that whole team, phenomenal. So is Ethereumized enough?

If you think about all of these organizations have really effective labs organizations that are incentivizing development, advocating for the ecosystem. Ethereum had that through ConsenSys, and I'm sure ConsenSys is still very involved, but they're not vocally involved like they used to be. So I feel like you need an actual labs organization that is doing that. So Ethereum, the foundation, is working on the development of the ecosystem. You need a real labs arm to say like, hey, we're going to conferences, we're talking to people, we're going to Wyoming, we're going to the US government. We're actually out there advocating for Ethereum. So like, Etherealize could be that, and it's a step in that direction. But in terms of where they're going, I'm excited to see, but probably massively understaffed versus all of these other competitors. And that's what they are. They're competitors, right? You're competing against Solana for block space. You're competing against Alexei, Alexei Blockspace. So it's really important that you have that. So I'm excited to see where they go, but I think we need to beef it up and really accelerate.

This episode is brought to you by zkSync. In 2024, zkSync took a step toward a multi-chain future by transforming from a single L2 into an ever-expanding network of zkChains, the Elastic Network. To onboard the whole world into crypto, many specialized chains must be able to coexist, work together, and share liquidity. Institutions and global financial leaders choose zkSync for unmatched security, scalable infrastructure, better onboarding, gasless transactions, and privacy-first design. Join over 20 chains, including Abstract, Sofon, and Cronos in the Elastic Network today. Behind zkSync is the zkStack. It is a one-stop platform for building private blockchains on Ethereum. The stack solves all the typical privacy, regulatory, user experience, and deployment concerns of blockchain without compromising performance or security. Join the Elastic Network today at zkSync.io/empire. Thanks to zkSync for making today's episode possible. I wanted to take a moment to tell you about today's sponsor, ZenRock, the permissionless decentralized custody network backed by one roundtable partners. 10T, Maven 11, and Spartan. Now available on Jupyter, ROCK is the native token for transactions within the ZenRock ecosystem and secures ZenRock's decentralized custody network. The first application launching on ZenRock is ZenBTC, yield-bearing Bitcoin on Solana. ZenBTC will be live in April 2025. To find out more, you can follow ZenRock on X or click the link in the show notes. Can we talk about the impact on all of the L2s and the rollups? Because I think there is basically my summary of what happened was rollup-centric future. And then all these L2s launched and we had Arbitrum and Optimism and Polygon and zkSync and then Base and WorldChain. And everyone's like, oh my God, look, it's so amazing. We have all these L2s. And then we woke up 2 years later and people said, crap, actually all the activity has actually moved to the L2s. It's not happening on the L1 anymore. Maybe that's not that good of a thing. Boom, let's scale the L1. And that's what's happening. And I think, I actually, I think it's going to go pretty well for Ethereum scaling the L1. But Ryan, what is the impact on, on the L2s? And maybe actually, I'd be curious, like, is it, is scaling the L1 net good or net bad for the L2s? And really, what's going to happen with them?

Yeah, it's absolutely net good.

Ryan, is there anything that Ethereum is doing that is net bad for Ethereum.

Is there anything that Ethereum's— I mean, I just spent the last 3 years of my life watching the price crater and fighting like a jolly good war on the inside to try to solve some of these issues. You know, Vivek and I tried to co-found a precursor to Etherealize in Q1 '22, which at the time was not well received because nobody cared about that stuff back then. So yeah, I mean, You asked me that question 5 months ago. Yeah, what Ethereum's not doing well is a lot of stuff. A lot of stuff.

Yeah.

But really, the ship, the big ship is turning and we're really starting to fire on all cylinders. So, you know, I think if I had to flag something, I would agree with Tom that Etherealize is so high quality but insufficient bench depth to go to market across the world, you know, even across America. So we need more Ethereumized stat. There's a lot of talk about scaling the L1, and one thing that's generally underappreciated is scaling is block space supply. What about scaling L1 demand? Why are L2s crushing it? Because they get out and they grow their on-chain economies through the lens of their own business models. So that, you know, the L1 needs block space demand growth, and that's something we're not doing a great job at today. Starting to get better.

And so I guess the L2 question, like, yeah, beneficial to rollups or competitive to rollups? Or differently asked, is scaling the L1 net good or net bad for the L2s?

It's massively net good. And the reason for that is that the— there's this very popular but incorrect idea that the whole point of L2s is technical scaling. And it's true that the fact that the L1 was not scalable on a technical level was the, the impetus, the, the original reason to launch the L2 Enterprise. But technical scaling is not the most important form of scaling provided by the L2 ecosystem. The most important form of scaling provided by L2s is political diversity. It's scaling the way the world actually works. It allows the world's many very serious organizations, governments, corporations, institutions, banks, tech companies, states, cities. It, it allows them to control and customize their Layer 2 chains to benefit from being part of the overall Ethereum economy while expressing their own business models. The L2 marketplace represents business model diversity and business model innovation. It is inventive primarily, And technical scalability is an input and requirement into that, but it's not the whole thing in and of itself. So even if the L1 was perfectly scalable and had, you know, in some fantasy world, infinite TPS, you're still gonna have all these large players that want to create their own walled gardens that are, you know, their embassy in the major city. It's their hotel that they control it and own it and they customize a business model, but they benefit from this dense web of economic connections to, to other L2s, to the L1, to other apps importing and exporting assets and services, you know, in the overall Ethereum security zone. And so, and so if the L1 was infinitely scalable, they're still going to build application frameworks that give them permissioning, that give them a certain level of controlled access, that give them customized block space that are specialized towards their use case, their business model. And when they finish that exercise, those like institutional SDKs on this hypothetically infinitely scalable L1, what are they going to look like? What are those SDKs, those development kits, going to look like? They're going to look a lot like L2s look today. So L2s are just a fantastic vehicle for the world to come on-chain. And so L1 scalability is not in opposition to L2 scaling because the L1 could never hope, could never hope to be as customizable or controllable, personalizable as the inventive Cambrian explosion of all these wild business models going on in the L2 ecosystem. Okay, so it's really perfectly complementary and it's not at all in contention.

I think the problem is The problem is UX. People want a seamless, easy experience, and the latest upgrade to Ethereum is working towards that with account abstraction. Great, fantastic. I can pay in other tokens. My wallet immediately signs things for me in terms of transacting across chains and things like that. But if I have to make a swap from Arbitrum to Ethereum to do a transaction, it's confusing. It takes time. Think about back to Amazon, the whole innovation that really move their business is that one click. They want to eliminate as many buttons as possible. Right now on Ethereum, too many buttons, too confusing, too hard to do things. If I want to tell someone to go trade on Hyperliquid right now as a friend, oh wait, you got to bridge to Arbitrum and then it's like, okay, you got to deposit and then you got— it takes too many steps. It's way too hard. We're moving there and I've been saying this since '22, but Solana's opportunity I always thought was the Ethereum roadmap is going to take way too long to deliver than the user is willing to wait for. And that has proven to be true. And I think will continue to be true until we accelerate the Ethereum roadmap. Like, eventually, yes, I think we're going to get there. Like, 10 years, the vision is amazing. But people don't care about 10 years from now, right? Like, they care about next year.

So, Tom, what do you think? Would you take the other side of Ryan then? Would you say that this pivot of making the L1 better maybe thinking about the L2 specifically as this kind of cohort of the original L2s of like zkSync and Polygon and Optimism and Arbitrum, uh, would you argue that this pivot to make the L1 better is beneficial to them or net bad for them?

So I would argue we're not actually focusing on the L1. So if you look at the upgrade path right now, Fusaka, um, Pectra, going forward, all these things we're talking about scaling L2s, you larger blobs, you know, things like that, that are scaling the L2 layer. There's effectively no one looking at the L1 until later '26, I think, on the Ethereum roadmap right now, which in my view is far too late, right? I think we have—

but isn't that on the roadmap that was shared? Is that— that's on the updated roadmap?

On the updated roadmap, late '26 is when we're actually going to be starting.

Then why are all these EF folks tweeting out we got to make the L1 better if it's not on the roadmap for another almost 2 years?

Great question.

Yeah. So Fusaka is expected to launch later this year, and Tom's absolutely correct that this is an L2-focused, a blob scaling-focused upgrade. The big feature in Fusaka is peer-to-peer data availability sampling, which is a mouthful that means that my validator doesn't have to download 100% of all the blobs. I can download some of the blobs, uh, and then the overall system keeps track of all of the blobs, kind of like BitTorrent where you're sort of sending and receiving small parts, uh, between the, the whole network of computers, and, and, and it's able to achieve kind of better behavior as a whole. And so that Fusaka upgrade is going to approximately 6x— or pardon me, uh, 8x the blob capacity, which was doubled in PECTRA. So we went from 3 to 6 in PECTRA a couple weeks ago, or last week, whenever it's been, you know, kind of a week where decades happen. And then in Fusaka, we're going to go from 6— current target is up to 48. And it's true that there's not currently planned any L1 scaling in Fusaka in terms of specific EIPs. The— and what the core dev community is working towards now is the hard fork after Fusaka, Glamsterdam. They're looking at finding the right set of L1 plus L2 changes to go in that. And it's kind of TBD and very much still, still on the whiteboard, you know, a lot of, a lot of ideas in the backlog and finding the right set of those to deliver. So it is true that there's not going to be any explicit L1 scaling upgrades landing until at least later in 2026. But it's also true that there's efforts ongoing today to raise the gas limit on the L1, which has sort of been heavily studied. And there's this thought that, you know, we could double capacity today. And they're working through that, for example, by shipping clients with higher default gas limits because the bandwidth of the Ethereum L1 is one of the few key economic parameters and technical parameters that's controlled by the decentralized set of validators that are proposing the blocks, uh, and not by the protocol, uh, process of, you know, the researchers determining the upgrades that go into the, the big PDF that describes Ethereum, you know, like, like at the white paper level. And so, uh, all that's needed to scale the L1, uh, in terms of gas limits specifically, is that the validators have to update their config to raise the gas limit So there's a big push now to go up to 60 million, which is about double. So yeah, Tom's right. There's no good— there's no specific L1 upgrade shipping in the hard fork process until at least later on in 2026. But it's also the case that we're scaling the L1 gas limit kind of today with that drive to increase the client settings.

Hmm. Yeah, I don't know.

I was—

Santi and I talked about this on a podcast the other day. So it's on L2B, right? You've obviously got like the Pi And if what Ethereum is talking about is really taking more chunks of that pie in-house and doing more, offering more and more chunks of those pies. Yeah, I mean, it's part of the Ethereum offering, essentially. So when I was in Dubai at Token, you talk to some of these founders and they're like, look, if ETH is offering more and more and more of these things that are what we think of as unique to us, and then Ethereum starts offering them, they're now competing with us. Why are we doing this whole ETH alignment dance when like ETH alignment used to be really important and now ETH alignment means I get a nice tweet from Vitalik once a month. So that might be the— I don't know, Tom, I'm curious how you think, like maybe that's the counterargument.

Yeah. So yeah, just to touch on that and Ryan's point, I think it's a very obvious problem that like, so the gas limit upgrade is a social consensus thing, which folks have to do across the validator set. There needs to be native upgrade changes to an L1. This is competition. And when you're saying, I'm going to have a software roadmap effectively 2 years from now to meet the competition where they are today, I mean, that's certainly a problem in my mind. So I think the L2-centric roadmap is important. Blobs are full today. Fantastic. But we need to move things here. We need to move things along. And that should excite people, right? Even if you start to put those things first and foremost and saying, I want speed, I want faster execution, et cetera, on the native L1, you're going to get builders excited, you're going to get VCs excited because right now in the space, especially as an active investor, people are investing and actively looking outside of Ethereum because they just see this roadmap and they're like, all right, they'll get there in 2 years. Great. Let me— we'll come back in a few years as things kind of proliferate, right? So, you know, I think just indicating the commitment to scale the L1 outside of just sending a few tweets, like you said, Janno, is immensely important. It needs to be on the roadmap. We need to accelerate.

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Yeah, it'd be shortsighted, right? And premature. 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 direct and indirect value accrual 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 kind of like it, honestly.

Why do you like it?

Why do you like it?

So there's, there's a few schools of thought. So if you're thinking about Ethereum 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. 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 roadmap today, right? We're looking towards base rollups in the future, which are going to directly enshrine a lot of the sequencing revenue that L2s are getting today in Ethereum, the main chain. So we're kind of on the roadmap there. 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 a tax is a way to do that, great.

Ryan, I see you're shaking your head. Is that an agreement or in disapproval?

Yeah, I think that I agree with Tom through the lens of, uh, like, we need to hustle. Just 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 beauty, the beauty of the L2 marketplace ultimately is its, is its diversity, is it, is its inventiveness. And base rollups 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 rollups while simultaneously causing their fee revenue and MEV to more directly accrue to L1. It's beautiful, but it's not going to be the right solution for all people. It's going to have tradeoffs. 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 these 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. So when we think about this value accrual and this, this tariffing the L2s, The reason I'm deeply unconcerned about that is because it is so unbelievably early for the on-chain story. And in the years and decades to come, like, Ethereum is going to be 10 years old in, in about 2 months. Ethereum mainnet. It's very exciting, you know, great milestone. It's been, 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 stablecoins are on Ethereum. It's over— it's about 90% if you exclude Tron, which Tron's very successful but so centralized that it's going to limit its growth opportunities. And so, all right, 60%, about $140 billion stablecoins issued across Ethereum L1 plus L2, uh, you know, 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 pie. I'm interested in on-chain growth, getting 1,000x 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 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 is going to be this incredible level up for the whole economic system. And the lion's 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's going to make alt L1s look and be less important than today. It's going to make Bitcoin look and be less important than today. And that's going to drive the value accrual 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 a long-term Ethereum investor and participant.

Well, let's say, like, look, I mean, the timeline, of course, has been, you know, riddled with, like, these vocal factions. But I mean, It's still a $300 billion asset.

Like, uh, yeah, with, with, uh, with over 10 times the amount of capital that Solana has, for example.

Putting aside other, other systems, uh, I mean, it is by far the second largest crypto network. Uh, it is a $300 billion asset. Um, I would, as an investor, look at that and say there's a lot of baked-in expectations to what you're talking about, which is When you think about, okay, what is the value accrual for ETH as that substrate, and how do you get to that valuation? I would say not just Ethereum, but every other crypto project needs to over the next 10 years, if not sooner, start proving that we can break this self-referential aspect that we have, which is there's like 10 active users on-chain, and they're all doing recursive leverage. So, how do we grow into this valuation? I mean, I can't tell you with a straight face that these networks should be worth what they are. By any semblance of fundamental analysis, I can't get to a $300 billion valuation. Help me understand that. What do you need to believe for that to be the case?

Yeah, Santi, so this is exactly what I was talking about earlier. How do you actually, with a straight face, value these assets if you're not looking at cash flow and you assume a lot of these revenues are going to go to zero at the L1 layer? The app layer, I think, totally justified to look at revenue, users, all those things that are really important to individual companies. And the only way that I could really justify it is like, if we're effectively building like the new Linux, the new substrate of the whole internet, you really have to value these things on the amount that is secured for the current infrastructure and all projected future infrastructure. That's applications, assets, users, et cetera, because that is the base layer of all of these things. And I think each individual investor needs to look at that and say like, okay, do I think crypto is going to grow precipitously? Do I think A huge amount of assets are going on-chain. Yes, yes, yes. What chain do I think that's going to happen on and why? And then you can actually value that based on the percentage of assets you think are going to eventually come on-chain at some point in the future.

And just to double-click on that, so you're saying, say there's a trillion to 5 trillion of assets that are secured by Ethereum. Um, there is some proportion by which the fully diluted market cap of ETH should grow in some relationship to that. And, and that's just like, uh, abs— like, that just puts aside like cash flow, MEV fees. It's really just there is some proportionate amount that needs to grow in lockstep with that as you secure more assets.

Exactly. So, and it's probably because of the amount of ETH that's staked. I've done the calculations, but it's effectively like if you have, say, $5 trillion, like you said, right? If there was some theoretical value I could acquire for Ethereum to attack that $5 trillion vector of assets, then that should theoretically be the value of ETH, the asset. Now, whether or not it's going to trade at that theoretical value, whether or not there's some encumbrances that actually acquiring that amount of ETH to utilize that attack vector is sort of secondary. I think you can ascribe whatever value you want to that, but theoretically, that should be, in my mind, some level of value based on that asset. And it's the only thing you could really tie these network values to at the end of the day, in my mind.

Ryan, I want to get to you in a minute, but I guess the analogy would be like the United States, the world's sovereign, the hegemony of the world.

Okay.

The dollar and its military presence and social capital and culture that has been exported. Okay, you look at the US tax revenue that the government collects is only a very small sliver of what you could, you know, start to think about what is the social currency or whatever the US— but like the tax revenue is actually quite small relative to the amount of economic activity that is happening. It's already a fraction, whether it's 10%, 20%, 30%, right? Um, and that tax fluctuates, but it's still a fraction of it. So like, I was just trying to think about as you were saying that, like, economic security is something that we talk about a lot. But I guess like, I don't know, maybe we should bring in like a Tarun of the world.

Like, yeah, so you should think about this way. If you— sorry, sorry to interrupt. If you acquired more US dollars, right, like, or if you could, you pose an attack vector to any one individual area of the government. And the answer is no. Right.

So like China and accumulate all these treasuries and then, you know, like have a pretty good say in the negotiation table.

But yeah, yeah, effectively. But, you know, presumably China could dump all their treasuries, the yields go higher, and then someone else buys those things at a certain market price. But Ethereum is directly, effectively tied to network consensus. So you can affect consensus by holding more Ethereum, right? So you can't do that with dollars. You can't do that with other governments, which is why inherently these assets directly have to be tied to the amount of total value they're securing.

I want to talk about just like bull case for ETH here. Like, you know, ETH is at $2,000 or $2,500 today or two. I haven't actually— should check the price before this episode, but somewhere around $2,500. It's, you know, had this big god candle in the past week. It's been ripping as an asset finally. Tommy, you were— I saw a tweet from you. It was like $10K ETH. I forget when you sent this, or maybe it was in a group chat. Maybe it was in a group chat, but Lay out the bull case as you see it.

Yeah, yeah. I sent that tweet. Some people are really excited and then other people like Kyle Cimani wanted to bet me $1 million that it was not going to be true.

The classic Cimani public bet.

Amazing. Yeah. So I think it's going to happen, you know, at some point in the next, you know, call it 18 to 24 months. And the reason why is I think assets— back to my fundamental case that I've talked about before. Assets are coming on-chain faster than people think, right? We just saw the Maldivian government the other day announced they're tokenizing $9 billion worth of real estate and bring that on-chain. There are a number of those types of announcements coming. And when they're looking for where they're going to put their assets on-chain, where do you think they're going to actively want to secure those? Places like Ethereum. I mean, we could talk about stablecoin growth all day. Another vector. I mean, there are just huge amounts of assets coming through. Not only sovereigns, not only through stablecoins, but also through corporates and others who are actively deploying. And I'm just really excited for Ethereum in that regard. It, in my mind, still has the biggest level of network effects, biggest level of security, and will continue to drive demand. And that's not to say that that cannot be eroded, right? Personally, and for our fund structures, we hold ETH and Solana in about the same proportion just because, you know, Solana is about a fifth of the value of ETH right now. And there are— there is a lot of room for appreciation to grow. And Ethereum really cannot sit on, you know, rest on its laurels here. It really has to continue to accelerate. But I think, you know, folks are seeing that, recognizing the opportunity. And I think a lot of the TVL is going to go to Ethereum and going to continue to accelerate that growth.

Uh, is there— if you're sitting down with someone and they said Tom, what's, what's the big catalyst for this, right? ETH is the same price it was 7 years ago. What's, what's the catalyst? Is it the pivot? Is it the, is it RWAs and tokenization and institutional capital? The only place they're going to play is on ETH. Is it something else? Ryan, I'm also curious to get your take on that as well.

But yeah, so for me, you know, I think it's a number of small catalysts that are going to come across the board, and that's going to happen with assets that's already so big. It's not going to be— we all think back to the Merge, right? The Merge was going to be the big catalyst that sent ETH to $10K, but it was just an incremental step on the journey. And I think there's going to be a lot of incremental steps on the journey that we talked about here today. So yes, it's Ethereumize. It's more business development capabilities. Yes, it's scaling the L1. Yes, it's integrating more and more specific L2s for what they're good for in terms of actually customization at the L2 level. It's all of these things in coordination together, and coordination is the key there, that are actively going to accelerate the ETH price. We're at such a level, as Santi mentioned, 300 billion plus ETH, that it's not just going to be one thing that sends ETH that doubles or triples because the asset is so big already. You need to make those incremental changes across the board that effectively move this huge technology company forward.

Ryan, what do you think about that? Any, any, anything that Tom missed in terms of just like the mega bull case for ETH and how you would lay that out?

Yeah, I don't know, I don't know if Tom missed anything. I mean, I absolutely agree it's going to be an incremental journey. Uh, the merge, uh, ended up being a huge sell the news event. Um, you know, uh, uh, a lot of that has nothing to do with the merge's fault. It was these other issues we talked about on the show around, uh, the transition to L1 plus L2. And so I think I think if I disagree with Tom on anything, it's that I'm an Ethereum mega bull. I think Ethereum is going to eat the economic world. I think it's going to be a multi-trillion dollar asset. You know, I first picked up Solana at $2.75. I've made a lot of money on Solana and they've had a fantastic window of opportunity. They had a fundamentally different strategy, which they executed masterfully, where they combined a relatively centralized and high-scale physical architecture with a relatively centralized and aggressive business development architect, you know, business development design where a lot of the same leaders who are calling the technical shots in Solana are also the ones who are selling into apps and selling into government. And that's been a really, really great strategy for them. And, you know, they also have timeless strengths such as they have a particularly great app layer for net new innovation and they're very curious and they genuinely help builders. And that's something Ethereum is trying to do more of. And, you know, their ability to help builders has created success stories such as their dPIN. You know, their project Helium just announced, you know, like yet another big new, you know, milestone. Like they're building real apps on Solana. If you took Ethereum and you just Thanosed Ethereum and it was totally gone, Solana would be like 95% of what's left over in the programmatic app layer. But Ethereum's not getting Thanos. And the fact is that Ethereum's decision to scale with the modular roadmap and the L1 plus L2 scales the way the world actually works. And Solana's running into political scaling challenges. They're running into monolithic scaling challenges. You know, they sell the same, you know, whatever their TPS is, you know, they're— there's the Fire Dancer theoretical TPS about shipping it. Like, you know, I offered to You know, I, I, I, I, on a, on a Twitter Spaces with Mert last year offered to bet Mert quite a bit of money that Firedancer wouldn't launch on a particular schedule since past. This because it's very hard for Solana to launch a new client because their current client is optimized for what it does. It's relatively low level. They don't have a protocol spec. There's no like PDF that describes Solana. The client is the chain. And that has big implications for risk and decentralization and growth. And so like Solana is doing a great job, but Ethereum, Ethereum is now through the woods, through, through kind of this swamp of this troubled growing period. And it scales the way the world actually works. And it offers the world what it actually needs in terms of that choice of L1 for risk minimization and capital, capital density, or L2 for choose your own adventure, control and customization and business model. This, this is, this model is going to really take over the world. And so, yeah, I think Ethereum is going to be a multi-trillion dollar asset. I think we're gonna enjoy the lion's share of the coming gold rush of on-chain growth that was kind of unlocked by this new administration. So, uh, yeah, the future is extremely bright, and, uh, yeah, I'm very, very happy with my ETH pegs.

Yeah, maybe as we think about bringing this episode home, Tom, you mentioned you guys have equal, roughly equal exposure to ETH and SOL. I'm curious what the, the rest of the portfolio looks like right now.

Yeah, so, um, just to clarify, that's personal portfolio on our other sort of hedge fund side of our business. We, um, discretionary traders. So, you know, so personal, whatever portfolio that is. Yeah, so for me, um, primarily those two assets and then some longer tail plays that I like, uh, you know, in terms of upside potential. So Kaido, Godzilla, a few others that I think are really, really big. Um, but I think if you're in this asset class, you really, you want to do two things. You, you want to not miss the beta of the asset class, and I think capturing that through ETH and Solana is very clear in my mind. And then you want to allocate for home runs, whether that be through venture or through some of these other bets that I mentioned. So that's how I've really thought about it. But I think you want to probability weight those base level bets in terms of whether you think Ethereum is going to do better or Solana. And I think the coordination challenges in Ethereum are really getting me there were challenges in the past and they're getting me excited going forward and how we're solving them. But, you know, if you're a reasonable investor in the past kind of year and you've looked at Ethereum and you're probability weighting the success going forward, you've had to have some Solana exposure or other L1 exposure because you weren't as sure as you were in 2021, 2022 that Ethereum could really execute. Today, I feel a lot better about that. And if we were to rebalance the portfolio today, it'd be a little more heavy on ETH to So I think ETH's future is enormous. It's bright, and it's because of a lot of the things we talked about in this episode.

On this click, just want to— what about L2 tokens? Optimism, Arbitrum? Delete them all.

Delete them all. Yeah, I don't understand the value of them. Doesn't make any sense to me. They're going to be natively in the L1 at some point through base rollups and others. And not to— there are great teams that are building there. They're scaling the L1. Fantastic. I just don't understand why these things individually need tokens when, in fact, effectively all the value accrual at the end of the day is going to be.

Ryan, do you agree with that?

I, I, in a word, no. However, I think there's a great truth to what Tom's saying in that every L2 token needs to justify its existence, and each individual L2 token will succeed or fail on its own merits based on its own unique circumstances of how the L2 is doing, what the tokenomics are, what, you know, it has to justify its existence. And, you know, Tom's right that similar to DeFi tokens and app tokens and meme tokens, many L2 tokens probably shouldn't exist and will result in, you know, the marginal buyer losing a lot of capital. But, you know, I think the best ones will be very, very good because their L2s and their tokenomics and that, that whole, that whole, that how they tie it together in a big picture will be very strong. So Yeah, and I think the ability for L2s to compete in the token marketplace and show that inventiveness is a big strength of the model. So I'm not bearish L2 tokens in total. I just think they're tokens. Some will do well and some will do poorly.

Yeah. Ryan, what's your second biggest holding outside of ETH right now?

Yeah, so I've become a mega bull of WorldChain. And the reason is that I think if you look at the at the crypto platforms that are, uh, high growth and have a token and put this token front and center in their own design of their values and their organization and their tokenomics and their users. And they're not like kind of burying the token as almost like, is the token going to play a big role. I think if you look at the Venn diagram of high growth, has a token, puts the token front and center, I think World's at the direct center of that. I think—

has Sam Altman associated with them.

Yeah, I mean, right. Like there's a lot of great things about World and they're really posting the numbers. Like their new mini app framework has unbelievably successful. I was talking to a guy a couple of weeks ago who vibe coded an app and he's getting like 50,000 unique humans using it per day. Just because their app store is so small right now. It's like, it's like a new iPhone kind of app store gold rush. So, uh, yeah, I mean, I'm here to talk about how Ethereum is going to be a multi-trillion dollar asset, but I think that WorldChain is doing something very special. And it's not the only, you know, there's a lot of other really great layer 2s, uh, uh, in Ethereum. Uh, for example, Base is extremely high growth. But, you know, I, I'm not an equity investor. Like, I don't own coin just because it's not my world. And Base doesn't have a token. So for me, World is kind of like the growth of Base with a token, you know, and it doesn't have a token.

Seems like it's not doing well, though.

I don't get it.

Yeah, well, you know, they just got Coinbase got in, uh, included in the S&P 500 and they're already ranked like, I think, number 176. So super, super excited for them and their growth. But, you know, equities aren't my world.

Yeah. So I know we're wrapping up. So I guess the last thing I'll leave users with, I've probably been more critical than folks would think of the Ethereum roadmap in a bull case episode, but I think this is like the exact right time to be critical of this enormous asset that has all of this potential because like I feel like we're 98% of the way there and that last 2% is where we just need to like get together as a community and fix some of these things that we've been having issues with. And it's like if you don't actively say the problems and address them, they're just going to continue to exist. So enormously bullish Ethereum. But like, there are certain things we just got to really double-click on as a community. Yeah.

Tom, Ryan, appreciate you guys. Yeah.

So, you know, just to kind of give a bit of a closing remark here, Ethereum is 15% of the market cap of Bitcoin and 1.5% the market cap of gold. And as on-chain grows 1,000x in the coming years and the lion's share of it is on Ethereum, it's going to become obvious to folks that in the store of value landscape, in like this, this, you know, Ethereum is going to end up being much more important than people think relative to Bitcoin and gold.

Good closing thought. Ryan, thanks for the time. Tom, thanks for the time.

Gentlemen, thank you so much for your time.

Cheers, guys.