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- [00:04]
A
In a brand new blog post, Vitalik Buterin positions Defi as the main questline of the Ethereum project. He thinks Defi can and should be Ethereum's core business that provides the economic backbone to the rest of the Ethereum project. He makes this comparison between Ethereum's Defi and Google's search, where Google search was this boring business, but it was a stable, dependable revenue engine, massively profitable revenue engine that sustains the Google network and enables Google to have more experimental values driven. Moonshots at Bankless. We think this article is significant, historic. Historic even. Yeah, because of what it represents for Ethereum and also Vitalik's attitude towards what Ethereum is good for. So in this episode we're going to break down the article, we're going to highlight the main points, provide some commentary and then give our takes about what we think was perhaps left unsaid or left up to the imagination of the reader. Ryan, what do you think?
- [01:03]
B
I love this article and I gotta say, you and I, David, we have a big imagination. So there's lots of embellishment we could do and there's lots of interpretation we can bring into this episode. And of course we're going to do that because this is a Bankless Takes episode. So it's not just Vitalik's take, it's mostly my take.
- [01:20]
A
Our take about Vitalik's takes.
- [01:23]
B
Just content upon content here. David, before we get in, we got some friends and sponsors, we got a shout out, tell them about zero G, the AI blockchain.
- [01:34]
A
Zero G brand new AI layer one chain that exists to be an end to end decentralized, truly verifiable AI operating system. It's massively scalable, so you can actually put AI on the blockchain, which in previous generations of blockchains that made that sentence made no sense. But with zero G you can actually put AI on the blockchain and think of like a. It's a modular chain with compute storage, data availability and also agent frameworks that are all part of the ecosystem subset, second to finality with like a thousand x lower gas fees than any leading LL1. Because of course AI is very resource intensive so you need that scalability. There's a link in the show notes so you can go find out more information about Zero Gravity right now.
- [02:14]
B
All right, David, let's get to the article. Here's the title. Low Risk Defi can be for Ethereum. What search was for Google? This is a Vitalik Buterin post. He posts his thoughts on Vitalik Eth Limo. This is, I guess, a decentralized link that you can access anywhere.
- [02:32]
A
Yep.
- [02:33]
B
Okay. And we don't always go over Vitalik blog posts. I read every single one. I think you do the same.
- [02:39]
A
Yeah, you and I talk about every single one.
- [02:42]
B
Most of the time we talk about them because most of the time there's some insight. There's something really interesting. I think he is. He is the best writer in Crypto as far as I'm concerned, and has been for as long as I've been here. Anyway, the reason we're doing an entire episode on this is because it's significant, because it's important, because this is Vitalik saying, Defi is good and Defi is Ethereum's killer app. And this is kind of a milestone moment in some ways. Not to say he hasn't in the past been, I guess, encouraging of Defi, but this is the first time he's come out and said, hey, we found a killer app for Ethereum. Let's call it what it is. It's Defi. Now, first impression some people might have is, well, isn't this kind of late? What do you think about that? Is this late? Why is Vitalik waiting so long to call it now?
- [03:36]
A
Yeah, that was my initial reaction, where there was. If you were, you know, closely paying attention to Ethereum and the arc of Ethereum and, like, providing commentary to Ethereum, like, we have been. It's. It's. If you're paying attention, it's like, okay, none of this is inherently new.
- [03:52]
B
It's obvious, right.
- [03:53]
A
Bankless, what that means, kind of, at least to us, our opinionated version of what a blockchain should be, what blockchains do. Defi has always been the main. The main arc. It leverages the core tenants of what makes a good blockchain, a blockchain to their fullest extent. And we stumbled into it in, like, 2017, and DeFi has been growing ever since. And so in my DMs with you, I was like, yeah, man. Like, he could have wrote, like, we knew this was the case post 2022, when all of Cefi broke and all of Defi was working. We had the validation back then, and it's 2025, so what's the deal?
- [04:30]
B
Yeah, I've got a take on that later in the episode, and I think it's less about Vitalik coming out and saying, hey, Ethereum is for Defi. I feel like he's done that in the past. What he's more saying in this article is that Low risk, Defi is now ready for the rest of the world and it's kind of proven. So I think that is a higher bar. You know, Vitalik has always been a fan of Defi from my perspective. Right. If you go back to the original Ethereum white paper, the use cases in the white paper were they were all Defi. Yeah, it was like minting. It was, you know, stable coins. It was all Defi application. So he's always been fully on board with Defi, at least from my perspective. He's just waiting for it to be low risk enough to be able to recommend it to global societies around the world. And I think that's what this post is. It's kind of a coming out post.
- [05:21]
A
For that, I think, to put up emphasis on that point. This is not Vitalik saying I think Defi is neat. This is Vitalik saying defi is ready. Yes. Which is a core difference. Exactly. So there's three main sections in this article. The main argument is Defi's mature. The second argument is that it's Defi is culturally congruent with Ethereum's goals. And then the third argument is the Google analogy is that Defi is the backbone that can support a variety of different moonshot investments. Many won't work, but some will change the world.
- [05:55]
B
It pays for all the nice things that we want on Ethereum. Right. It's the core business model, basically. All right, let's break it down then. The main argument, the Defi is mature argument. What does he say about that?
- [06:06]
A
Yeah, let me read a quote that I think kind of expresses this best straight from the article. He says Defi hacks and losses continue to exist, but they are increasingly being pushed out to further edges of the ecosystem. What he means by this is like newer Defi protocols, new more experimental and speculative Defi apps, a stable core of applications is forming that is proving remarkably robust. Tail risks that cannot be ruled out continue to exist. But such tail risks exist in tradfi too. And given increasing global political instability, for many people worldwide, the tail risks of Tradfi are now greater than the tail risks of Defi. In the long run, one could expect the transparency and automated execution in a mature Defi ecosystem to make it much more stable than Tradfi. Now that's a quote. I think we got the first wind of this, the first like market based, proven outcome of this in 2022 when there were multibillion dollar losses by centralized lending platforms. Galaxy Gemini, Celsius, ftx, even all the way up to dcg.
- [07:12]
B
That was effectively crypto Tradfi. Right?
- [07:14]
A
Crypto crypto tradfi, Crypto tradfi Crypto centralized exchange, centralized platforms. Yeah. And it was a contagion of risk that was not unlike what we saw in 2008. Honestly, it was like a microcosm of 2008. And it happened because of the nature of tradfi. There was human trust involved and there was, you know, a black box accounting.
- [07:33]
B
There was Alex Mashinsky screwed us, Alex Machinsky, yeah.
- [07:37]
A
To say nothing about sbf. And so meanwhile, while Tradfi was blowing up, Defi was orderly and efficient. AAVE liquidations happened. Orderly and efficient. You know, Uniswap kept on working. Everything about Defi just works. And so like you and I, who have, we have our money in Defi. That's where, that's where I play my games. I was fine.
- [07:59]
B
Yeah.
- [07:59]
A
And anyone who is in Defi was totally fine. And that was the first big crisis moment where we had market based validation where like this works. And I think Vitalik has definitely noticed that. And he was like, okay, and I'm going to let it steep for two more years.
- [08:15]
B
Yeah, I'm going to let it steep. Well, he's got this graph, I think you are pointing out one type of risk that occurs with traditional finance that doesn't occur with Defi, which is kind of this, this custody risk, this lack of transparency risk, this black box risk which is like, well, what is SBF doing behind the scenes? Right? Well he's actually taking customer deposit money and you putting that somewhere else, vesting in other things that, that risk, that type of risk doesn't inherently exist in, in Defi because it's all open, transparent. You know, you can see all the operations, everything that's going on. That's not to say there aren't risks though, David, there are risks in Defi and those risks have been substantial over time. Right. So one of those key risks is of course hacking type of risks. Smart contract, Smart contract exploits, exploits, economic attacks, Oracle attacks, all of these different attacks. And so this is a chart Vitalik includes in his post, which is, you know, it's got years and the percent of L1 defi losses as a fraction of L1 total value locked. And we should say the context of this entire post is mostly about Ethereum L1. It's not about L2s, it's not about some of the more experimental posts. He's talking about low risk DeFi on Ethereum's layer one. And this is a chart showing that the Risk and the losses as a percentage of the total are actually going down up until 2025. Like, we haven't really had any big defi smart contract risk events like hacks, anything like that. And this is because our smart contracts are getting better, right? They have more linde. The more value you deposit, the more years that go by without a hack, the safer everything becomes. And it's getting to the point. The reason Vitalik, I think, was letting some of this steep is now we're at the point where it's like less risky than a lot of tradfi options. Right. That's what this graph is showing.
- [10:18]
A
You can see exactly why Vitalik wrote this article here and now in this graph right here. So for the listeners, the top of the graph is 2%. And so if you're at 2%, that means 2% of the layer 1 TVL was lost as a result to exploits, hacks, some, some sort of reason.
- [10:35]
B
That was in 2019, right?
- [10:36]
A
That was in 2019. Well, actually, 2019, it's, it's. I think it's labeled 5.5%, so very.
- [10:41]
B
Very high off the charts.
- [10:42]
A
Yeah, yeah, it was, it was a little bit over 1% in 2022. Maybe it was at 1% in 2023. And then in 2024, you can see it above the, the baseline above zero. And then at 2025 it goes down even lower than 2024. And again, if it's close to the bottom line, where the top, the top of the graph is at 2%, the bottom is 0, 2024 and 2025 is you round down to effectively 0. And so Vitalik is saying, okay, 2024, we were at what point, 008% losses, and at 2025 we're even lower than that. I now feel good and safe about promoting defi because we have two years in a row where losses are so incredibly marginal that I feel good about promoting this.
- [11:26]
B
Yeah, and that's why he titles the post Low Risk Defi, because he's talking about a specific subset of defi and maybe we should. He doesn't mention specific projects, I think, but he does mention some, like, types of activity. And the way I would boil this down is basically, you know how bankless used to have a thing which is like the money verbs, Right? What are the verbs? What are the things that you want to do with your money in defi.
- [11:54]
A
Rather than save, send, lend.
- [11:56]
B
Exactly. Okay, so the basic money verbs, the first is hold. Okay. So you can do that within defi. Right now the Next is spend. You could do that very well in DEFI right now. And the next is lend, borrow and trade. You could also say like maybe mint or issue assets. These are the core low risk defi types of activities that are happening on chain. The core money verbs I think that are sort of fit the bill of low risk. What sort of projects, David, come to mind when I say those things.
- [12:31]
A
Ave and while, while Vitalik did not say or write AAVE in the article he did cite, he linked out to a tweet that he wrote on Twitter congratulating AAVE for basically getting losses down to zero. Yeah, and so it wasn't named in the article, but it was named by proxy. And aave, AAVE is where I keep my money. Like I've, I've had like plenty of deposits into AAVE over the years. And globally across the world you can get 5% APY on your, on your US dollar fiat coins in AAVE. And most of the world is on a fiat standard that is worse than a dollar. And so not only can you can Americans get a better savings rate than any bank account inside of America, but foreigners can access the dollar and also get a better savings rate. And so part of what our interpretation of why Vitalik's writing this article is not not just because DEFI losses have basically approached zero, but also that accessing Ethereum and accessing money currency on Ethereum, mainly stablecoins is now just globally possible. On ramps are all around the world. People know about Ethereum. UX is approaching like something that's globally ready. And so it's defi is safe and it is globally accessible. It's not really benefiting, you know, first world upper middle class and higher people. It's, it's also fair and democratized.
- [13:59]
B
Exactly. It's exporting the same like the best banking system in the world to anybody with an Internet connection. Here's a take I liked on Twitter. Defi is far from perfect. Not really that decentralized, not really that safe. From the perspective of a wealthy first world citizen, safe defi can be unattractive. But for the other 90% of the world that doesn't have the privilege of using trustworthy financial institutions under the purview of a reliable government. Local banks are shady, regulation is unreliable and confiscation is always just one bureaucrat's signature away, DEFI fixes this. All right, so we are exporting the best banking system of the world to everybody with an Internet connection so it's available. So if somebody is looking at you know, maybe 5% tether, you know, versus maybe you can get a money market fund in your brokerage account. I get it. Right. If you have access to that money market in your brokerage account as giving you 4%, then why would you subject yourself to additional defi risk by depositing it into aave? Okay, I get that. But that's not what most of the world has access to. Okay. And so I think part of the reason he's excited is because low risk defi has gotten to the point where it's less risky than tradfi on a lot of dimensions for a lot of people who wouldn't have access to it. And now they instantly, with you know, a click of the button, they have access to that. So it's democratizing. I think maybe that gets to Vitalik. Second point here, David, which is that this is defi is culturally congruent with the Ethereum community's goals. So this is like a, a values based argument. Can you make this point?
- [15:36]
A
Yeah. So there's three different sub points here. He makes the argument that defi contributes to Ethereum and ETH economically. Second, that it serves a clearly valuable and honorable purpose. We're going to talk about that honorable word. And then also lastly, it does not give the Ethereum layer one any perverse incentives. So it's kind of, it's incentive compatible with the goals of the Ethereum Layer one. So let's talk about these one by one by one. It contributes to Ethereum and eth economically by both using a large volume of ETH as a collateral asset and by paying high volumes of transaction fees. So if you go to ultrasound money there is a burn leaderboard and you can go down and you can check out what applications have burnt the most amount of eth. And coming in at a whopping number one is Uniswap. The place where people go to exchange tokens, exchanging assets is probably the application, the on chain application of any blockchain's.
- [16:32]
B
App layer Swap exchange. These are the money verbs here, right?
- [16:35]
A
Yeah, it's like swap your stables for eth, swap your terrible local fiat currency for dollars, stuff like this. Yep. Followed up by basic ETH transfers, followed up by tether payments, followed up by meta swap, there's other units and then, and then if there's also circle gets in there and then if you go to like more recent time frames, it's like some of the newer apps like World Liberty Financial got in there somehow. But like primarily it's stablecoin sends so you can, you can Send money around, you can use Ethereum as payment rails, which I mean defi adjacent and then swapping which anyone who is depositing into a long term like DeFi app, like AAVE, like a slow defi app. Yeah, like AAVE or maker has to swap and then also AAVE and maker do spit out some like amount of MEV which goes to pay for layer one gas fees due to, due to liquidations and things like this.
- [17:30]
B
And so David, what he's saying is these core low risk defi apps, they're actually burning the, the most E on the layer one and this is far more than NFTs, this is far more than layer twos at this point the core defi apps are burning the most ETH and thereby through virtue of that, that burn, providing economic value back to Ether, the asset itself. So it's good for the business model. Right?
- [17:56]
A
Well there's two prongs here. There's that one and then there's the first one that he said which is that it uses a large volume of ETH as a collateral asset. So one is a revenue based conversation as in people need to buy Ethereum block space to do defi and that is what sustains the security of the network. That what promotes long term throws off.
- [18:17]
B
Fees and those fees are burnt. Right.
- [18:19]
A
That's like, encourages, encourages staking, provides like a basic foundation evaluation to ETH and then also it just uses, it sucks up a lot of ether to be put into Defi. Every single Defi app, every single significant defi Apple has Ether in its vaults. And so people are buying and holding Ether inside of Defi and that's a very high margin business where okay, there's revenue, where it's like, okay, there's a $100 transaction and Ethereum will get 10 cents of that. There's bajillions of those. And that's how we accumulate some notion of revenue for Ethereum. Low margins, high volume.
- [18:57]
B
Sure.
- [18:58]
A
Buying Ether and putting it into a defi asset collateral high margins. In fact it's only positive margins Y because if you were just directly buying the. What is the first product of Ethereum which is eth, that's just, that's just straight like capital allocation into Ethereum. And so these two different prongs both sustain Ethereum economically.
- [19:21]
B
I think it's important to mention those two different prongs because when I saw some of the pushback against this article, it was kind of the, the force within crypto Twitter that is very, very much excited about revenue as the primary model for every layer one, except for the special snowflake, which is Bitcoin. And they interpreted this, or they wanted to interpret this to say, well, Vitalik is saying revenue is incredibly important. And I want to point out that Vitalik is not saying that, or at least he's not just saying that. He's also saying ETH as collateral is part of the value of eth. He's saying the value of ETH is important. Some portion of that comes from revenue or fees and. And another portion of that comes from ETH being used as a collateral asset and attracting value that way. He's talking about both as value contributors. So I think it's like a misreading to basically look at this and say, oh, Vitalik is saying that revenue is important. And so.
- [20:19]
A
Which he is, which he is.
- [20:21]
B
He is saying that. He's saying it's an attribute to increasing the value of eth. But it's not the only one. Also, ETH as a collateral asset is. And importantly, I don't think he's like weighing, you know, how much each contributes.
- [20:33]
A
You're saying it does both and both are good.
- [20:36]
B
Fair.
- [20:37]
A
Fair, yeah. Okay, so this is the only part. Let's put on the armchair, armchair psychologist of Vitalik here. This is the only place in the article where he actually talks about ETH as a collateral asset and therefore implies. Well, actually, no, he explicitly states that, yes, ETH as a collateral asset inside of defi economically recycles value back to Ethereum, the Ethereum project. And that's good.
- [21:01]
B
Yes.
- [21:02]
A
So there's some argum that are baked in there. ETH as a collateral asset provides value to eth. So the, the fact that you can deposit ETH in a maker da unis, swap and use that as a collateral asset imbues ETH with value. I mean, we know this because if you have to buy Ether, that's. That contributes value. If you have defi apps that incent the purchasing and saving and hoarding of ether, that's good for eth. This is the first time that I've ever seen Vitalik fundamentally link the value of a collateral asset inside of DEFI to the, to the value of eth.
- [21:36]
B
It's definitely a plus one for the ETH as a store of value asset type of thing that we've been saying.
- [21:42]
A
Which we would say ETH is money. It's like this is our train of thought to how you get to ETH is money. Exactly this. I don't think Vitalik will ever go all the way, but this is the furthest same thing we have ever gotten Vitalik to say that, yes, ETH is money.
- [21:57]
B
I think it's the same thing. I agree. Yeah. He, he, when he talks about even in beginning, he said it's important for Ethereum to bring in applications that bring in enough revenue so the rev people will point to that and be like, oh, he said revenue to economically sustain the ecosystem. Whether that means sustaining the value of eth. Okay, all right. So he's talking about clearly the value of eth, whether it comes from revenue or whether it comes from ETH being used as a store of value asset in the ecosystem. Anyway. Okay, that's his second point. Or that's his first point. The second point is he says it serves a clearly valuable and honorable purpose. Can you sharpen that argument a little bit?
- [22:37]
A
Yeah, I think it goes back to Defi is a unique product that is uniquely enabled by a smart contract blockchain. It is globally accessible at its maturity. Like when a robust, mature defi ecosystem where blockchain itself is also mature, as in there are on ramps, there's ways to access this. UX isn't completely dogshit, meaning that like people around the world, grandmas can figure out how to get savings out of Defi. That is now possible. And since it's, since it's democratized and globally accessible, it uses Ethereum as the grand coordination layer, the financial layer of the Internet for everyone in the world to be able to access. And that's part of, I think like what Vitalik is going after when he says the word honorable or noble. Like these are. This is a normal thing to do. We are democratizing finance. We are putting everyone on the same playing field. And that is capital G good. That is a good thing for the world.
- [23:33]
B
Some people don't like this. I would say don't. Some people don't like. Yeah, okay, so some people don't like the take that some use cases of blockchains can be more honorable than other use cases of blockchains. Right.
- [23:45]
A
It's a. I think that that says more about that person than what that statement is.
- [23:51]
B
But it's a value if it's a values driven take. And he actually, he kind of takes a shot meme coins a little bit here. Right. He says it needs to be something the use cases in order to be honorable or good capital G good for the world. It does seem to be something that is at least not actively unethical or not embarrassing. It's just not possible to say with a straight face, you're Excited about the ecosystem because it's positively changing the world if the single largest application is political. Meme coins. Okay. So all of the meme coin lovers, all the pumped out fun people, maybe people in the kind of other communities, alternative layer one communities that have built their revenue model off of casinos and meme coins are like, come on, stop being so, I don't know, holier than thou. Yeah, stop being so judgmental indignant. Holier than now.
- [24:41]
A
What's your take?
- [24:42]
B
Yeah, righteous. What's your take about that?
- [24:46]
A
I think like things like pump dot fun meme coins like this where I'll put it into the category of like financial entertainment.
- [24:54]
B
Sure.
- [24:55]
A
I think that is going to change the world.
- [24:56]
B
Sure.
- [24:57]
A
Like I think that will be the future in a sense and like I'm okay with that. It's going to be kind of a wash in terms of like is it good or bad? It's just the future and I don't have a problem with that. It's not positively like lifting up the global tide of equitability and financial access.
- [25:17]
B
The way accessing a stablecoin if you're in Argentina and you don't have a good local currency and you don't have a bank that will service you and accessing a stablecoin that gives you the ability to earn like 5% in a currency that like is useful for something. Be able to pay with low fees, be able to not to be unbanked by your local banks. Right. That is better for the society of Argentina than pumped out fund creators.
- [25:46]
A
Yeah.
- [25:46]
B
Like can we just say that?
- [25:48]
A
Yes, I think we can say that. I think so. Let me, let me be on the defense of pump fund creators or no, please, I'll go to the, the infotainment platforms where like pump fun live streaming and content creation. Maybe that's like YouTube.
- [26:03]
B
Yeah.
- [26:04]
A
In a sense like YouTube actually did an incredible amount of wealth generation and democratizing access to like long tail content creators and really uplifted the world of content creation. And that was good. That was good. There are some costs to YouTube. There are, there's an algorithm that kind of shoehorns people into echo chambers. It can get, it can get weird down there and it's a double edged sword on net. Very good. But like double edged sword. I don't think there's a double edge to defi. Yeah, low risk defi. I think it is strictly only good. And that's why Vitalik is comfortable promoting.
- [26:37]
B
Unless you're an authoritarian and you're trying to control your population. Right. This is a good thing. And I think that this goes back to maybe the, the high bar that Vitalik has for putting the, the V stamp of approval on something. It has to be, I think for him to come out and be like, I'm bullish. This is a use case that's good for the world. It has to be unequivocal and good in the broadest sense. Which is like the collective general population of that society says, hey, this has helped our society, this has helped our community. I think that's what he's looking for. Right? And these low risk defi use cases hit those marks and hit that bar.
- [27:17]
A
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- [29:38]
B
The third point here, it does not give Ethereum L1 perverse incentives. Okay, this is a bit more nuanced and it requires a bit more subtlety I think in understanding blockchain designs. What is he saying on this score?
- [29:52]
A
He's saying that low risk defi aligns with the properties of the Ethereum layer one. What has the Ethereum layer one optimized for security above all? Because the Ethereum layer one has a multi client architecture. So if one client breaks, the system keeps on running. Meaning that if you have money in defi, an entire Ethereum client can break like a shard, a version an interpretation of what Ethereum is. Because every single client is a version of Ethereum one can just totally vanish and all of a sudden nothing happens. Yeah, Ethereum just keeps on chugging. Your assets in defi are fine slower block time. So Ethereum has 12 second block times. Why does it have such slow block times? Because it doesn't ever want to go down, ever. So preserves users property rights. So things like this. There are architecture decisions that Ethereum has made because of its values. It strongly aligns with what slow defi wants. Low risk defi wants Slow defi never wants to lose users money, it always wants to work. Property rights needs to be maximally preserved and so the properties of what low risk defi what it wants aligns with what Ethereum wants to itself be. So there is congruency here, there's harmony here between these use cases. And so a very large Defi ecosystem doesn't push Ethereum to the high frequency trading end of blockchain design where he thinks it's that's where you quote, unquote, lose your soul. We talked about that when we had Vitalik on the podcast most recently. It aligns with what Ethereum wants to be.
- [31:29]
B
Yeah, this goes back to what I think Vitalik, this is maybe a more opinionated sort of Vitalik take and design. But Vitalik genuinely does believe that high frequency trading types of use case, incredibly fast defi type use cases. He uses the term low risk defi in this entire article, but I would also swap that with the term slow defi versus fast defi. So the fast defi use cases, he thinks those are better off left to layer 2s, where there can be some centralization, like sequencer centralization, but you get to put like the dictator in a box. All right, so the dictator in a box, it's centralized, but it's on this layer two. And users still get their property right guarantees because the L1 enforces that. Right. And if you think about like Vitalik's whole take on the world, I think if Vitalik is sort of a maxi on anything, and I think he's more of a balanced type of person, but he'd probably be like a property rights maxi. Right? That's the thing he thinks in blockchains are most important. And so he thinks high frequency type fast defi type use cases will lead to underlying centralization. And he doesn't want that in the layer one. Okay, now that doesn't mean not scaling the layer one to its limits and sufficiency, but it does mean that you create a space for the high frequency fast defi use cases where you aren't architecturally. You don't have to compromise on some of the decentralization features that make Ethereum so important. So of course there's some pushback on that from other people in different crypto communities, but that's his underlying take.
- [33:15]
A
So, summarizing everything, the three main points. One, low risk DeFi naturally recycles value back into Ethereum. Two, low risk DeFi is good for the world. And three, it leaned into Ethereum's unique strengths. I'll. I'll get a different spin on each of these things. One, low risk DeFi is aligned with Ethereum, it naturally recycles back to Ethereum, it's aligned with Ethereum. Two, low risk DeFi is aligned with the world, it's aligned with what the world wants. And then three, it leans into Ethereum's unique strengths. It doesn't massively change Ethereum's trajectory. So we get to keep on the same path. And so the whole article fits the roadmap. The whole article is about this is this low risk defi. Ethereum and the world can all have strong resonance with each other, strong product market fit with each other.
- [34:06]
B
Yep. And I think this gets to actually part of the title of this article which is okay, where does Google fit in? How is this like search for Google? Okay, so can you talk about that?
- [34:17]
A
Okay, so Google's search ads is the foundation of Google. It's the economic backbone of Google. It makes bajillion dollars from ads and it has for a long time. Google first indexed the Internet, they made an algorithm for how to search the Internet and then that was its main product. And everything downstream of Google, of YouTube, Gmail, of Sush. Yeah, it all came from Google's ad revenue. Ad revenue is reliable, massive low risk and it creates the economic foundation that funds everything else Google does. So Google on the back of this has built things like Android, Gmail, Chrome, Waymo, more recently Gemini. And so Google's just famous for this model of this one business model pays.
- [35:03]
B
The bills for everything.
- [35:04]
A
Pays the bills for everything. And they can afford to invest in speculative bets.
- [35:09]
B
Yep.
- [35:09]
A
Thing things like AI now is the most recent one like Google's a major player in AI. Why was it able to do that? Because it was making hella ad revenue for the last 30 years I think. 30 years, yeah. So he's extrapolating the same equivalent to Ethereum. So low risk defi apps, things like stable savings payments, fully collateralized lending, stable coins can provide Ethereum with a steady values aligned fee base. They aren't. It's not the sexiest part of crypto. It's actually supposed to be boring, but it's a durable backbone that ensures Ethereum has consistent economic viability moving forward. And so there it affords Ethereum moonshots. It gives Ethereum the flexibility to invest in things that are speculative. What are some speculative things? Maybe I'll ask Ryan, this here are three for me on chain sovereign identity, super valuable if we can. I have a United States citizenship, you have a United States citizenship. But the whole idea of like crypto is like we're not just citizens of the respective nation state that we are born in. We are individuals in our own right. How do we come up with an identity system that aligns with that right on chain sovereign identity, decentralized governance at scale. How do we upgrade democracy? How do we upgrade our human coordination system? Stuff like that, alternative non fiat currencies. Well all of the fiat currencies are slowly decaying versus the dollar. The dollar's also decaying. How do we fix this? Like how do we have flat coins that work at a global scale? So things like this, I don't know if you have any more to add to that list.
- [36:43]
B
Yeah, no, I think that's exactly right. Right. And so some of those things you mentioned, like on chain sovereign identity, it's not necessarily clear that that's going to be a powerful value accretion mechanism for ether the asset. Right. If you just have your on, you know, can be verified, that's not necessarily spending gas, it's not necessarily requiring eth as collateral in order to verify your identity. So it might be a very important use case for the world, but it might not be core to kind of the value driver for ether the asset. And so that's a distinction. I agree with all of that. I would also add that this low risk defi provides like a foundation for higher level financial use cases as well. So one example is maybe credit. So if you had identity going on chain and then you have kind of low risk defi collateral backed lending and borrowing type of mechanisms, then you can combine that with some other data set, maybe somebody's identity on chain history plus some of their off chain history and you get a new money Lego defi primitive which is like you get credit on chain but what you require before that is you require, you know, stablecoins, you need lending and borrowing money, money protocols and then you can eventually work your way to credit. Right. So this also provides a nice foundation for future finance primitives.
- [38:11]
A
Important to view that like foundation as the bottom of a funnel. So the way that Google works, Android, Gmail, Chrome, Waymo, Gemini, these are all like top of funnel financial services. And especially when they're building out like Google Maps for instance, made no money for years, but now there's ad revenue inside of Google Maps because they figured out that like oh, people are using this on a massive scale. It's providing a ton of utility. We can stick ads in there. And so Google Maps is just a top of funnel adoption for Google and Ethereum, like on chain sovereign identity. If the whole world's like Internet citizenship standard is on Ethereum, that's just a massive top of funnel magnet to the entire world. And at the bottom of that funnel is defi. It's like well my identity is on Ethereum, maybe I should also put my savings on Ethereum too. And so all of these moonshots are ultimately just like trying to penetrate the world's TAM and try to make The TAM even larger.
- [39:09]
B
So I think this article is basically Vitalik saying that Defi is Ethereum's killer use case. This is, this is how he concludes it. For all these reasons, I would argue that a stronger focus on low risk defi puts us. By us, he means Ethereum in a position much better for economically sustaining the ecosystem while maintaining cultural and values more congruent than search and ads ever could. For Google. Oh, there's another point he makes, is just like, whereas for Google, ads were kind of toxic, right? Because what's the incentive for anybody selling you ads? It's to get you dopamine addicted to a screen, collect your data. Collect your data. Yeah. Mine your data and dopamine addiction addict. You okay?
- [39:49]
A
Yeah.
- [39:50]
B
Defi, low risk Defi does not have those clear kind of like, you know, it doesn't have a clear toxic side. Perverse incentive. Right. So it's better from, from that square too. So he says low risk Defi is already supporting the Ethereum economy. It's making the world a better place today. And it's synergistic with many of the more experimental applications that people on Ethereum are building. It is a project that we can be proud of. They go, david, we've been working for Vitalik to be proud of us this entire time and now he's proud of us.
- [40:21]
A
Or the last line is a project that we can all be proud of. I had a moment when I read that. Yeah. I was like, oh, oh wow, that was, that's great.
- [40:30]
B
Proud tear emoji kind of thing.
- [40:31]
A
Yeah, proud, proud to your emoji.
- [40:32]
B
Yeah, I get it.
- [40:33]
A
All right, so that was the, the summary of the article. I think I just wanted to like, deliberate with Ryan for a little bit. And there's also a bunch of crypto Twitter commentary counter takes. So we're going to get to all of that and more. But first a moment to talk about some of these fantastic sponsors that make the show possible. Imagine a world where traditional finance meets the power of blockchain seamlessly. That's what Mantle is pioneering with Blockchain for Banking, a revolutionary new category at the intersection of TradFi and Web3. At the heart is UR, the world's first money app. Built fully on chain, it gives you a Swiss IBAN account blending fiat currencies like the euro, the Swiss franchise, the United States dollar or the Renminbi with crypto all in one place. Enjoy real world usability and blockchain's trust and programmability transactions. Post directly to the blockchain compatible with Tradfi Rails and packed with integrated DEFI futures. You are transforms Mantle Network into the ultimate platform for on chain financial services, unifying payments, trading and assets like the MI4. The MES protocol and functions FBTC backed by developer grants, ecosystem incentives and top distribution through the UR app reward stations and BYBIT launch pool for MNT holders. Every economic activity in you are drives value back to you, embodying the entire stack and future growth of this super app ecosystem. Follow Mantle on X at Mantel Underscore Official for the latest updates on blockchain for banking. That's x.com/mantle underscore official introducing Cajun aka Verify, the world's largest verified distribution protocol or VDP. If you're trying to grow a real protocol or app, you need real users doing real actions. If it's not Verify, it's just noise. At the core of verify is Poggy KJN's identity and reputation framework. It helps you reach humans, not bots improves what your users actually did so your budget goes to the right people. With Verify, you can run verified user acquisition with confidence, keeping people coming back with retention tools like loyalty rewards, quests and achievements and even power AI training and evaluation using trusted verified user groups, ensuring your models learn from clean data. And when it's time to reward your community, there's the K Store, a global rewards marketplace where users can redeem perks that connect directly back to your app. Put simply, when growth is built on real users, you grow faster. And that's exactly what Verify delivers. If you're building a Web three AI or gaming, request a demo to grow your protocol@www.kgen.IO demo that's www.kgen.IO demo. In the wild west of Defi, stability and innovation are everything. Which is why you should check out Frack Frax Finance, the protocol revolutionizing stablecoins, DeFi and Rolex. The core of Frax finance is Frax USD, which is backed by BlackRock's Institutional Biddle Fund. Frax designed Frax USD for best in class yields across Defi t bills and carry trade returns all in one. Just head to frax.com then stake it to earn some of the best yields in Defi. Want even more? Bridge your Frax USD over to the fractal layer 2 for the same yield plus fractal points and explore fractals diverse layer 2 ecosystem with protocols like Curve Convex and more, all rewarding early adopters. Frax isn't just a protocol, it's a digital nation powered by the FXS token and governed by its global community. Acquire fxs through frax.com or your go to Dex Stake it and help shape FRAX Nation's future. Ready to join the forefront of DeFi? Visit frax.com now to start earning with Frax USD and staked Frax USD. And for Bankless listeners, you can use frax.com/r/bankless when bridging to Fraxel for exclusive Fraxel perks and boosted rewards. So, Ryan, when I, when I first read this article, I was like, well, none of this is really new. Yeah, actually. And it would have been really nice to have had this, you know, three years ago. I feel like we were ready for this article three years ago after cefi blew up and Defi didn't.
- [44:07]
B
Sure.
- [44:08]
A
And I feel like that was actually a lot of people say it's like Defi has been around for a long time and I think this is the first time where like, Defi itself got a main article feature on Vitalik's blocks.
- [44:19]
B
Yeah, that's right. I think that's right. So. And there had been some pushback in the Ethereum community previously. I mean, I don't know, was this a year ago, year and a half ago? It's bubbled up at various times, which is just like even Defi founders inside of Ethereum just being like, hey, why can't the EF be more supportive to Defi? We're paying the bills around here. We're doing the things, we're exporting the value.
- [44:42]
A
We're keeping the lights off.
- [44:43]
B
Yeah. Can't you guys say something nice to the founders? And it just.
- [44:47]
A
Have you said thank you once?
- [44:51]
B
Exactly. It's completely that. Right. And so. And it felt, I think it felt like a little bit from people building in Defi and Ethereum. It felt a little bit like pulling teeth. Okay, just say one nice thing. Okay, here's my take on that. My take is just that people who haven't watched Vitalik over time don't know how insanely high a bar it is. Like, for him to say he's genuinely proud of a financial app use case. Okay. And some people might be like, well, that's stupid. Right? Like, obviously AAVE was doing great like a few years ago and Uniswap's been great. And it is true he's been supportive of these apps over time, but it hasn't gotten to the place where it's low risk enough. And it hits Vitalik's bar of being like a broad global societal good. If you adopt this thing, right? I don't think Vitalik wants to be in the position of saying, everybody get on board with Defi and then having another DAO hack happen. Right, okay.
- [45:53]
A
Yeah. Remember how Vitalik started his time with Ethereum?
- [45:57]
B
That happened so early in the Ethereum lifespan. And I think he was like, scarred from that, probably in a good way to just be like, hey, there's no rush here.
- [46:08]
A
Let things bake.
- [46:09]
B
Let's let it bake for a while before I say this is safe and let people experiment. Let the crypto natives and those on the frontier and, you know, this is the West. You know, you could lose what you put in. Let those people do that. And I'm going to wait until this bakes to a point where I can go to a normie and say, hey, you know, this is good, actually, this is good. Yeah, you should check out aave. In fact, your entire government should think about, like, banking and Defi and like, you know, supporting legislation to do that. I think that's the type of bar that it took for Vitalik to write this type of post and the reason it's taken like 10 damn years to do it. Right.
- [46:49]
A
So Vitalik doesn't have just a bar. First you have to get over Vitalik's bar and then you have to stay over Vitalik's bar for two years. And that's the actual bar that you have to get over there.
- [47:01]
B
Yeah, yeah. I do think the analogy is good with the comparing Defi to Google, because if you think about Ethereum, it's sort of like the Internet of value. It's kind of a protocol. You can build anything on top of it. And then Defi would be Ethereum's Google in this case. So one other dimension of this, right? If we look at my interpretation of this post, okay, and so this is a little bit of like Ryan's take, maybe the bankless take is a few things I read into. This is not only optimism for Defi, but also an optimism for Ether, the asset. He didn't come out and say eth to 10k.
- [47:42]
A
It's coded in there.
- [47:44]
B
Yeah, it's coded. So I'm reading eth to 10k. I'm reading eth to 100k in this article. But he doesn't say that because that's not his style. And also bullish on Ethereum's L1 scaling roadmap. So this entire world, this was an.
- [47:56]
A
Ethereum layer one article, right? It specified Ethereum layer one. It did not say Ethereum layer one.
- [48:02]
B
The low risk defi.
- [48:03]
A
Low risk defi must be on Ethereum layer 1 as a contingency.
- [48:08]
B
Yes, it is. And it's disproportionately already on the layer one. So if you take these things and you start to define them, okay, so ether as a store of value collateral, he names it as a collateral, that's kind of the world reserve asset, right? Defi as Ethereum's killer app, that's kind of a world banking layer. Not banks. Okay? Banks are controlled by individuals, institutions, governments, but banking are the money verbs, the lending and borrowing and trading and swapping and issuing things that you want to do. And that is now world accessible. Everybody with an Internet connection. And then Ethereum layer one, that's the ledger for slow defi or low risk defi. And then Ethereum layer 2s, that's the ledger for the fast high frequency trading defi. The types of activities that maybe exchanges are going to do. Okay. And if you look at those things across those four dimensions, David, we're actually making tremendous progress from a metric perspective. So let's take a look at our collateral. All right, our store of value collateral, that's about 500 billion right now. A little bit less than at the time I tweeted this. Unfortunately markets are down a little bit, but about 500 billion. Okay, so half a trillion, not too bad. The defi and we call that economic bandwidth. You know, that's more collateral. The more that goes up, the more defi stuff we can do on the back of this collateral. Okay, Defi assets on Ethereum, 500 billion right now. Okay, so that's all the stable coins, all the RC 20s, everything, all the non eth assets on top of this world ledger. And also defi total value locked. That's kind of the slow defi. We're out about 100 billion, so not too bad. Our collateral is half a trillion. Our defi assets are another half trillion. And then we get total locked in these low risk defi assets of 100 billion. And then we have some scalability metrics. So Ethereum layer 1 zoom about 20 transactions per second right now. But we have a roadmap to scale that to 10,000 transactions per second.
- [50:13]
A
A medium term roadmap.
- [50:14]
B
A medium term roadmap, right.
- [50:16]
A
Three to five years.
- [50:17]
B
Exactly. And where we're 3Xing every, every year, it's not just a one time. Suddenly everything's 10,000 transactions per second. And then we have Ethereum layer twos at 3,000 transactions per second with the ability to scale to a million Transactions per second. Okay, so to me this is like Vitalik also saying, hey, the roadmap is going well too. And these are some metrics that we can look at that are low risk defi type metrics that show we're moving in the right direction.
- [50:49]
A
Naturally, Ryan, there was some pushback on Twitter mainly from like the Rev people, which I thought was kind of interesting.
- [50:56]
B
These are the people that believe very much in that layer one should be.
- [51:00]
A
Valued based off of the revenue, revenue revenue that the block space produces.
- [51:05]
B
Either MEV revenue or transaction ordering revenue.
- [51:08]
A
Or just revenue is the number one thing. And these people also tend to not believe in the blank is money ideas about things. They're like, Bitcoin is digital gold unless.
- [51:19]
B
It'S, unless it's Bitcoin. Right. Then bitcoin gets kind of the digital gold pass.
- [51:23]
A
But other layer ones, the bitcoin gets the. Can be massively valuated without revenue. But everything else is revenue.
- [51:30]
B
Yes.
- [51:31]
A
So revenue for is the, the yardstick, the judgment stick for everything other than bitcoin. And they put revenue first. It's like the most important valuation. So John Charbonneau is like one of these people and he goes the tough reality once you start looking at revenue is that one Meme Coin app makes more money than ETH does in all of the low risk defi category and everything else combined. But ETH is 100x more expensive, which is totally a valid take if you are putting revenue as the number one valuation metric. That makes total sense if you think revenue is is. But the number one thing, David, isn't.
- [52:08]
B
He saying basically that like low risk defi is a low margin type business for a layer one that's not going to be a powerful business model the way Google Ads were for Google because it's just not off putting enough revenue. Isn't that basic? And he's saying that okay, look at something like Pump fund and the amount of revenue that it produces for Solana. And he's saying over here that's a high margin business.
- [52:39]
A
Low res defi, high volume. I don't know, high margin but very high volume.
- [52:43]
B
Yeah, high volume but also just like it's driving a lot of revenue for the layer one. Right. And he's saying that low risk defi is not this. It's kind of commodity. The transactions are small. There's not a lot of MEV type of opportunity. What's your take on that?
- [52:59]
A
Yes, actually I do kind of align with some of that as it relates to slow defi. When we say slow defi slow implies you're not doing a lot of transactions.
- [53:07]
B
Right.
- [53:07]
A
Like my assets in AAVE for example, they're staying put. They're saying put. I have, I've spent 50 cents total over the last six months because they don't do anything, they stay put.
- [53:18]
B
Yeah.
- [53:18]
A
And so granted that is true, that's actually a very low profitable business. In the same way that like buying and holding Bitcoin does nothing for bitcoin security.
- [53:28]
B
Exactly.
- [53:29]
A
Depositing stables in AAVE and just letting them bake there for years does very little for Ethereum security.
- [53:34]
B
Yes.
- [53:35]
A
AAVE does spit out plenty of revenue inside of liquidations. Sure. Because some people will like margin up and take leverage and that's going to aave.
- [53:44]
B
Right.
- [53:44]
A
And no, there's some, well I guess, yeah, there's bot comp, there's MEV competition to liquidate the person first but on net not that much actual block space. Blockchain fees uniswap very large blockchain fees on the Ethereum layer ones. Swapping is very resource intensive. Slow defi, not that much of a revenue driver.
- [54:07]
B
But the, the, the value is eth as collateral. Basically the whole thing.
- [54:13]
A
This is what John is missing.
- [54:14]
B
Okay.
- [54:15]
A
John is like revenue revenue, revenue revenue. And why he's comparing the pump fund meme coin platform which is so much exchanging, so much exchange.
- [54:24]
B
Sure.
- [54:25]
A
And he's, and he's comparing that to slow defi, which is you just use your savings and you put your savings there and you forget about it.
- [54:32]
B
And that puts a lot of reservation demand on either the asset in the same way that the main use case for Bitcoin is you hold bitcoin. Okay. And that's why people aren't doing anything on the bitcoin blockchain aside from moving some bitcoin back and forth. There's not a lot of activity, there's not a lot of block space fees generated. But the hold use case is providing like 2 trillion plus to the value of bitcoin the asset. Right. So slow defi, low risk defi, that's kind of the same as being a store of value type of chain and that's going to increase the reservation demand for eth asset. I think John might retort that like, like, okay, but ETH is going to get completely eaten by all of the real world assets like stablecoins on Ethereum. Okay. And so if you're doing that 5% yield, you're probably doing that off of stablecoins. What's your retort to that?
- [55:25]
A
Yeah, to some degree like stablecoins and ETH are pushing up against each other's space. So there's only so much like real estate, there's only so much capital out there and people choosing to allocate capital to that. That 5, 6% stablecoin yield versus a 3% eth yield. Yeah, you have to make an investment decision there. But more stablecoins on Ethereum ultimately is going to be good for eth.
- [55:47]
B
Yes. And who wants to hold their, their value in stable coins?
- [55:52]
A
Yeah. You know, like some people. Yeah. And then once they have enough, they are going to be like, well, I mean, store value is declining in value too. So let me go to an asset that doesn't really do that and let me look at what my options are. Bitcoin is an option. Ether is also an option.
- [56:11]
B
I think this gets back to one of the core assumptions that Vitalik has probably always made. Again, this maybe is downstream of him being somewhat of a property rights maximalist, let's say, which is like Vitalik has always operated under this assumption. I think this is my reading of him, that the most credibly neutral change would win the liquidity, would win the defi that matters most for these types of use cases and for the value of eth, would win the trust of the users and institutions and would win Stanis as world reserve asset. Maybe that last one is something that I'm imputing to Vitalik for Ether the asset, but his take I think is that the most credibly neutral chain will win all of these use cases. And I gotta say, when you look at the numbers, David, it seems like that's exactly what Ethereum is doing, going according to plan. Right. And I mean it's, it. I think it's hard to argue against that.
- [57:08]
A
To your point, there's a lot of things that Ethereum is getting where it's just undercutting pricing everywhere, where like it doesn't enshrine any apps, it leaves everything up to the market, it gives away all the value to the layer twos. And so it does it and it charge, it charges the minimum viable fee, the block space fee to have all of these products and services compete to be on the credibly neutral block space.
- [57:30]
B
Right.
- [57:30]
A
So it gives up a lot of the revenue because it doesn't collect, it doesn't like enforce any sort of fee for itself. So a lot of Ethereums like slow defi, very low margin, like ENS identity services, like almost no revenue whatsoever. But if you get the tam, you go, you open up the TAM by doing that to the world's largest possible tam. Now this is something that bitcoiners say about Bitcoin. Whereas like money is the largest possible tam.
- [57:59]
B
Yeah.
- [57:59]
A
If you're an open source, permissionless ecosystem that's massively, credibly neutral where you don't pick winners and losers and you just let the free market have a fair shot. Yeah, that's the world's largest tam. And then you get, you get the, you get the largest possible ecosystem on your chain.
- [58:16]
B
Yeah.
- [58:17]
A
And then we get to the part that I think many of the rev maximalists totally miss, which is like, okay, look at Pump Fun. It's spitting out one penny per transaction and there's a bajillion transactions and it's all. And a fraction of that is being burnt to Seoul. So very low margin but very high volume. When you have slow defy massive defi where you encourage savings. It's a savings utility. People save their wealth on Ethereum. They use Ethereum to just grow their wealth and ultimately some percentage of that flows back into well, I'm going to save it in the native currency, I'm going to save it in eth. It's the inverse model where a single swap on Pump Fun or Uniswap is like, okay, say I'm swapping a billion dollars and I'm paying Ethereum 25 cents. And so Ethereum collects 25 cents of revenue for that billion dollar swap. Very low margins, but hopefully very high volumes. If you buy Ether, it's inverted. Whereas if you buy a billion dollars of ETH and you pay a dollar on chain to, to make that swap, yeah, you, you lose the dollar. But the ETH collects a billion dollars of economic value and so the margin. So, so when John finishes this tweet and he goes this one tough reality. When you look at meme coin revenue makes more money than all low risk defi and everything else combined. But eth is 100x more expensive.
- [59:46]
B
He's also saying that eth is 100x better store of value, isn't he?
- [59:50]
A
Yes, that's what, that's the missing void in the argument that he for some reason just can't. The rev maximalists just don't see is like there's this one extremely high margin business which is holding ether money.
- [60:03]
B
Yeah, exactly. I completely agree. And this should not be a surprise to anybody because this is exactly what Bitcoin is doing too. Right?
- [60:10]
A
Yes. Bitcoin is the best high margin business. It has no business other than buying Bitcoin.
- [60:16]
B
Yeah, exactly. No, I Totally agree. It also the other thing, I think when you come at this from property rights and credible neutrality, you make different design decisions. So there's been this more recent push that I've seen of like people in crypto being like, well, Ethereum should increase revenue by like enshrining a particular stablecoin. Right or wrong?
- [60:35]
A
How about wrong wrong?
- [60:37]
B
How about we nationalize? AAVE is so good. How about Ethereum kind of like nationalizes it and creates its own like defi lending and borrowing protocol and like implements it.
- [60:47]
A
Okay, you know what happens then? You know what happens when you do those things. If you shrine in a state a single stablecoin, you lose the remaining 30 stablecoins that are on your blockchain. Exactly. Shrine, Aave, you kick out Morpho, you kick out. You kick out Euler, you kick out all the other people that are you.
- [61:03]
B
Picking winners and losers. Right. And then you're no longer a credibly neutral subs, you know, like a substrate for the rest of the world. Right. And so like that is such, such a short sighted type of decision.
- [61:15]
A
But I think so short sighted.
- [61:16]
B
It's exactly the type of decisions that maybe some L1s trying to compete for rev against Ethereum should make. But once they make those decisions, they're not the same.
- [61:26]
A
I would enshrine as many valuable products and services as possible.
- [61:29]
B
Or in particular if I was a layer two. I really think the Mega Eth move to do this deal with Athena for another source of revenue, which is the more assets and stable coins that we have on Mega Eth, the more revenue goes to our validation. Our token. If you're playing the productive asset Rev game, if you're kind of like a corporate company type chain with a project, you're not trying to be a credibly neutral infrastructure, you want to boost rev, play all of those games.
- [61:57]
A
Yes.
- [61:57]
B
If you're Ethereum, you should not be doing that.
- [61:59]
A
And this is you're playing a game at a higher dimension where you are letting other people compete to have market share.
- [62:06]
B
Yes. It feels like that should be obvious that we shouldn't have to say that.
- [62:10]
A
But it's weird that we're in 2025 and like this point doesn't land anyway.
- [62:16]
B
I do think a lot of the altern layer ones will be playing those types of games and ruining their credible neutrality and probably being much less competitive as a store of value as a result. So that's the t. Can I make.
- [62:25]
A
A comparison about this point?
- [62:27]
B
Sure.
- [62:27]
A
And so if we were, if we're going back to the Google analogy and if you go back to 1990 and you're and you say like, all right, let me invest in the search engine that has the most amount of money.
- [62:38]
B
Buying like AltaVista or Yahoo or something.
- [62:40]
A
You would end up buying Yahoo. Yeah, you would buy Yahoo. Yahoo was, was running circles around Google in 1990 for, for ad search revenue. And that's, that's the rev. Maximalist take in my mind. Uh, like in 1998, Yahoo reported $20 million of revenue by 2000 across the 1 billion mark. Uh, Google had nothing near that amount of revenue for a decade.
- [63:05]
B
Uh, and then Google came on the scene and eat their l ate their lunch, right?
- [63:09]
A
Totally. Yeah, totally.
- [63:10]
B
And I think that there's interesting is like Google's Mechanism was like PageRank algorithm, which was like sort of a more credibly neutral way of indexing and listing and prioritizing these websites. And so I think that's what made for better search results and is, you know, kind of a similar path there. There's one last case I want to throw throw your way, which is the argument that, okay, Ethereum is struggling with marketing messages. And like actually that's the contention. I'm not saying that, but that's the contention, right? You know, World computer Digital oil, you know, Internet Bond, ultrasound, Money App store, crypto stablecoin chain. What is it? What is it? Now here's Vitalik coming out and saying Ethereum is for low risk defi. Right? And the point being made that this is a confusion. It can't be everything like pick a lane. Is it low risk defi. Now that's not very marketing appealing. Like what are you guys doing over there? What's your take on this?
- [64:05]
A
Well, there's no central coordinating body around Ethereum messaging. And so that's a natural byproduct of a platform that is going for the world's largest tam. So yeah, I think kind of intuitively I can see why people would conclude at that, especially if it's their job who the author is their job to pay attention to.
- [64:24]
B
To marketing messages.
- [64:25]
A
To marketing messages. I was like, oh, there is a lot. It's very noisy. I can kind of see how that we came to that argument.
- [64:31]
B
The answer I always come to, which is something I hold which is just like, does the Internet have one single marketing message? Right. There are many different use cases on the Internet, of course. And there's no centralized body that's saying this is the marketing message of the Internet. Right. And so there's an element of, I think. And also I think there's an element of low risk defi going bankless. Ethereum as an Internet of value has always been the message and this is just another manifestation of that. And then it's also the third message which is maybe most important. Vitalik is not here to write marketing headlines. I don't think that's what the post was about. It was just saying, hey, we've come 10 years and we've got. I think we've discovered a killer app that is good for society that aligns with Ethereum values. Not just discovered it, but we can conclusively say it's now safe and ready for the rest of the world to onboard and we have a roadmap that's going to allow that to happen. I don't think his purpose was in writing the perfect marketing slogan or like message. That's not a thing that Vitalik does, so why interpret it as such?
- [65:40]
A
Yeah, I definitely agree with that.
- [65:41]
B
Well, shall we close it there, David Bullish post. I think. I think we both agree with Vitalik that Defi. Yes, indeed. Defi is the killer app of Ethereum.
- [65:51]
A
And this whole episode is just secretly a bankless victory lap.
- [65:56]
B
I think you're right. Gotta end it there though. Guys, none of this has been financial advice. Crypto is risky. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Journey. Thanks a lot.