Mike Ippolito, a savvy crypto commentator from Blockworks, and Jordi Alexander, Chief Alchemist at Mantle, delve into the future of Ethereum. They discuss the mixed performance of ETH in 2023 while highlighting the building momentum for 2024. Key topics include Ethereum's evolving role as a settlement layer, the impact of Layer 2 solutions on efficiency and costs, and the potential for decentralized networks amidst market challenges. The guests also share bullish predictions for ETH's price and its emergence as a credible global currency.
Ethereum's shift from an execution layer to a settlement layer for other chains allows for a diverse ecosystem of layer 2s and interoperable networks.
The importance of yield and restaking as drivers of value for ETH.
The need to move past outdated memes like 'ultrasound money' and instead highlight Ethereum's potential as an internet bond and a yield-bearing asset.
Focusing on Ethereum's unique strengths, such as community money and its network of stakers, in driving its future growth.
The value of decentralization in providing security, safeguarding against crises, and attracting market recognition.
Deep dives
ETH's Bullish Case for 2024: Layer 2s and Community Money
In this podcast episode, the panelists discuss the bullish case for Ethereum in 2024. They highlight different reasons for their optimism, such as the potential of layer 2 solutions and the concept of Ethereum as community money. The panelists agree that Ethereum's shift from an execution layer to a settlement layer for other chains is positive, as it allows for a diverse ecosystem of layer 2s and interoperable networks. They emphasize the importance of yield and restaking as drivers of value for ETH. While some concerns are raised about competition from other chains and the shifting narrative, overall, the panelists maintain a positive outlook on the future of Ethereum and its ability to attract institutional interest and long-term growth.
Navigating Ethereum's Transition and Narrative Challenges
The podcast delves into the challenges faced by Ethereum, such as the shifting narrative and the perception of being squeezed between Bitcoin and other layer 1 chains. The panelists acknowledge that Ethereum is evolving from an execution layer to a settlement layer, with layer 2s playing a significant role. They discuss the importance of focusing on Ethereum's strengths, such as its institutional adoption and community money concept. The panelists also stress the need to move past outdated memes like 'ultrasound money' and instead highlight Ethereum's potential as an internet bond and a yield-bearing asset. They suggest that Ethereum's strong network of stakers and the ability to secure other chains through restaking offer significant opportunities for long-term growth.
Ethereum's Role as a Settlement Layer and the Importance of Yield
The podcast highlights Ethereum's evolving role as a settlement layer for other chains and the significance of yield in the crypto world. The panelists discuss the value of Ethereum's network of stakers and the potential for ETH to become an internet bond. They acknowledge the challenges of managing the narrative around Ethereum's position in the market, particularly in relation to other layer 1 chains and the perception of being squeezed between them. However, they remain positive about Ethereum's ability to attract institutional interest and emphasize the benefits of integrating with layer 2 solutions. Overall, the panelists see yield as a key driver for ETH's value and stress the importance of focusing on Ethereum's unique strengths and potential for future growth.
Prospects for Ethereum in 2024: L2 Solutions, Yield, and Diversity
The podcast explores the prospects for Ethereum in 2024, including the importance of layer 2 solutions and yield-bearing assets. The panelists discuss Ethereum's transition from an execution layer to a settlement layer, and the potential opportunities for growth through restaking and providing security to other chains. They emphasize the significance of diversifying narratives and moving beyond outdated memes like 'ultrasound money'. While acknowledging the challenges of competition and evolving technology, the panelists remain bullish on Ethereum's prospects in attracting institutional interest and mainstream adoption. Overall, they stress the value of focusing on Ethereum's unique strengths, such as community money and its network of stakers, in driving its future growth.
The Value of Decentralization and Security
Decentralization is seen as a form of security and a safeguard in times of crisis. While some applications may not require decentralization, they still benefit from being built on Ethereum due to the existing network, liquidity, and user experience. Geopolitical tensions and the need for neutrality make decentralization a valuable trait in the long term. Even if future cohorts prioritize centralized solutions, the market will still recognize the value of decentralization.
Different Layers and Use Cases
In the future, different layer-two solutions will emerge to cater to specific use cases and sectors. Some layer-twos may prioritize execution speed and optimization for specific applications, while others may focus on providing a neutral settlement layer for various decentralized exchanges. The market will determine which layer-twos thrive based on the specific value they provide to developers and users.
Decentralization as a Survival Mechanism
Decentralization increases the resilience and survivability of blockchain networks. While new cohorts of crypto users may not prioritize decentralization ideologically, market-driven forces will still recognize the importance of decentralization for certain industries and use cases. Decentralized substrates offer credible neutrality and are better equipped to handle future challenges and catastrophic events compared to centralized alternatives.
The Future of Layer 2 Networks
The podcast episode discusses the potential future of layer 2 networks, envisioning a scenario where different layer 2 chains interoperate with each other to create a network of super chains. The speaker highlights the open-source nature of the technology, allowing failed experiments from one layer 2 chain to be easily ported to another. Specific examples such as Polygon's acquisition of Hermes and the potential for consolidation across major L2s like Optimism and Arbitrum are mentioned.
Credible Neutrality and Liquidity Fragmentation
The concept of credible neutrality is introduced, referring to a completely neutral layer that provides confidence to users that no other party, including geopolitical adversaries, can control or manipulate their wealth. The episode also touches on the topic of liquidity fragmentation, which is the concern that liquidity and users are spread across multiple layer 2 chains, creating inefficiencies and complexities for users. However, the speaker predicts that these issues will be solved through advancements in interoperability and user-friendly applications, ultimately leading to a more seamless and accessible user experience.
----- 2023 wasn’t great for Ethereum… from a price perspective. But it was fantastic from a building perspective.
Where does Ethereum go from here? What does 2024 have in store for ETH the asset and Ethereum the network?
Anthony Sassano, Mike Ippolito, and Jordi Alexander join to give a high level overview of the Ethereum ecosystem. The problems, the solutions, and the future.
0:00 Intro 6:13 Ethereum in 2023 17:40 ETH as Money 24:30 The Internet Bond 30:00 From Execution to Settlement 37:40 Inside vs Outside Crypto 43:20 Restaking and Data Availability 1:10:00 Layer 2s and Modularity 1:23:00 Fragmentation 1:33:15 Decentralization 1:46:50 Wrapping Up 1:51:00 ETH Price Predictions
------ RESOURCES
Anthony Sassano https://x.com/sassal0x?s=20
Mike Ippolito https://x.com/MikeIppolito_?s=20
Jordi Alexander https://x.com/gametheorizing?s=20
------ Not financial or tax advice. See our investment disclosures here: https://bankless.com/disclosures
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