DeFI TVL Drops, As Crypto Market Sinks. what’s next? #CryptoTownHall

**Scott Melker** (0:00)
Well, good morning, everyone. It's cloudy here in Las Vegas, weirdly. I don't see that very often, but that seems like a pretty good metaphor for the crypto market, which seems pretty cloudy. And not a whole lot going on. There's stuff going on about Ethereum, so I thought maybe we would start there. The report of DeFi TVL dropping is completely unsurprising, given the fall in the market itself. But curious if anybody else thinks that that is anything more meaningful.
More supposed to talk of whale selling Ethereum and foundation cuts and whatnot are perhaps more concerning. So maybe we should start there. But markets are certainly squishy on the speculative side. Although I will tell you, for anyone who cares, if you use poker as a proxy for speculative fever, the sizes of how many people are here at the horseshoe playing in the World Series of Poker is off the charts. So clearly, there is money out there for people to gamble. That much is clear. Prediction markets are saying similar things. So interesting world we live in.
William, how are you this morning? Are you behind the mic?

**William** (1:12)
Yeah, I'm here. I saw you talking about Ethereum. Obviously, it was in the news a lot yesterday.

**Scott Melker** (1:22)
You want to wrap it up for us?

**William** (1:23)
Sure. Yeah, yeah. I mean, this wasn't surprising. Three months ago, I wrote a post saying that we have seen the peak of the Ethereum foundation because I knew being an insider that things were in the works in terms of shedding people. But this is all by design. It's all by intent.
Yes, there are people that have been let go, but at the same time there are other organizations that are stepping up and fulfilling different roles that the Ethereum foundation did not want to be involved with.
I think this is good in the long term. What this means is that the diversification of decentralization is happening.
The Ethereum foundation specifically said, they don't want to be at the center of the ecosystem necessarily. They want to be a node. They want to be one of many other contributors. Now, is this a perfect situation right now? It's not because these new organizations are new, and they still have to show what they can do in the market. But in the long term, in the mid-term, I would say, in the next six months, I think it's all going to unravel. And it's going to be good because these organizations are going to be able to do the things that the foundation maybe was not willing, or was not wanting, or could not do in terms of being more aggressive. One of the criticism that the foundation would always get is that, they are not competitive enough, that they don't have this mentality of winning, wanting to win in the market. But I can tell you for sure, as you can see the signs, the satellite companies around the foundation, they sure want to win. The Bitmine, the Sharp Link, the Ethlabs, and the Economic Zone, the Consensus, Argot and so on. There's half a dozen to a dozen companies that are now going to be the stewards of Ethereum. And I think the days of seeing the foundation as the only driving force are going to be behind us. They will still do significant work.
They're still about 200 or so people, and they will continue to work on the core aspects of the protocol, which is a good thing. But there will be other ones that will be contributing to other features. And I think it's a good thing in the long term. Now, the market always is a bit behind in reacting to this, in figuring things out. And there will be a lag in realizing this, which is okay. But as usual, I'm optimistic about where things are going to be going.

**Scott Melker** (4:27)
Yeah. Well, I mean, the one thing that's interesting about the market, in terms of price action, I just checked, and it's actually staggeringly consistent. If you look at the 30-day performance between Bitcoin, Ethereum, Solana, XRP, pretty much everything not named Stellar Lumen and Zcash, you're down roughly 20%, 21%, 22% over 30 days. BNB is down only 15%, so I guess that's a star performer. Hyperliquid is down only 4% over 30 days, so I guess that's a real star performer. But certainly of Layer 1s, it's the entire market.
The correlations are lower. It looks more like what people talk about the stock market than it does about the crypto market because individual news on Ethereum or Solana or even Bitcoin seem to matter very, very little. It's just, okay, the whole thing's going down. And that's what it looks like. That's classic, obviously classic bear market behavior.