Joseph Chalom: Ethereum Is The Toll Road To Everything (Larry Fink's Words)

Andy (0:00)

I'm excited, I feel like Joseph and I, and maybe a couple others out there are so, it feels like we're a dying breed, Joe. It feels like we're one of the few that is left standing in a bullish Ethereum position. And so, it's a pleasure to have you back.

Joseph Chalom (0:16)

It is great to have you, and you are a hard worker. It seems like your partner is in Florida, probably pre-gaming for Florida versus Ole Miss.

Andy (0:25)

Yes, yes, this Saturday, big game. We are Gators, you know that. And so, we've got a big game on Saturday. We're excited.

I mean, how can you not be having fun? How can you not be excited with what we're seeing out there?

Joseph Chalom (0:39)

I am bullish right now, and I think we're through the worst of, whether you call it a cycle or a consolidation period, and I think the best is in front of us. So, I'm actually quite optimistic and bullish, and I hope that comes through today.

Andy (0:51)

Yeah, absolutely. Well, I am as well. And I think it's important to remind people why we're bullish Ethereum. Somehow, despite Ethereum being at the center of the on-chain economy and tokenization and tokenized finance being in the heart of its super cycle, somehow people have arrived at a bearish Ethereum conclusion, and that's not what we've arrived at. And so, it feels like there's a disconnect. And I think this is why. I think what happened is that we got two thesis that started to evolve as people were thinking through the winners of this upcoming cycle. On one hand, it was people that called the hard money cycle, the Bitcoin and the Zcash, and there's gold that is off-chain, but still plays into that. And then you've got the revenue meta, and you've got the hyperliquids and the lighters and the pump funds and the aerodromes and a lot of the coins and those that are accruing value from their protocols, getting real traction, real revenue and then accruing that to their token.

And then people saw Ethereum and they said, look, it's kind of stuck in the middle. The ethos money thesis didn't really play out. It's not generating a ton of revenue, despite Robinhood chain absolutely flying in terms of adoption, in terms of trading activity. You got Arbitrum that kind of provides this middleware component to Robinhood that does have a revenue share agreement that scales, but Ethereum has a flat fee component for its block space. So even though Robinhood's revenue is up 10x on its trading activity, Ethereum's revenue that it accrues is flat. And so people sort of look at that and they say, hey, how is this going to make sense in a world where a lot of these applications are driving a lot of revenue and we have other assets that are hard money, scarce assets that are benefiting from the accommodative monetary policy that we see at the highest level?

What is the bullish e-thesis? Please remind people what Ethereum is and why it is valuable.

Joseph Chalom (3:04)

So Ethereum has been building for 11 years since its Genesis block. And if you just start with the scoreboard, we're both fans of sports.

Ethereum has over 50% of all stable coin activity happening on them. And stable coins are 300 billion today. There'll be trillions in a few years.

Over 50% of tokenized real-world assets, and that is in the bottom of the first inning. There's only 30 billion. I would expect that to be in the hundreds of billions by next year. And then DeFi activity was built on Ethereum. It has the most TVL by a factor of eight or nine. And then when you add in the newest element, which is Agentic, Agentic will have to run where the liquidity is. It's not going to run on chains where there aren't stable coins, where there aren't tokenized assets. They need to be able to move money in hyper speed, and it really paces like we've never seen before. So I would argue that this is an internet infrastructure story, and that Ether will end up being the trust commodity for the future financial rails. So if you take a step back, Vitalik holds it the world's computer. I think Joe Lubin and I would start with, it'll be the settlement layer for almost all of finance, and that is extremely bullish. You talk about people who may not buy into this thesis. There were some very prominent people who sold out and capitulated in June when ETH was trading at 1530, and they missed a 70 percent run just in three months. This is going from narrative to production, and I would be betting, and we still have conviction a year later, that this is the exposure that will be driving most of the financial system on a go-forward basis. Don't look at revenue alone, look at the scoreboard, and that's the bullish thesis, even before agentic is added to the mix.