Keki Burjorjee
207 posts
@evohackr
Ph.D. work explains why recombinative (i.e. sexual) evolution is computationally efficient. https://t.co/NZxxI2gXSK. Ex-chief scientist @Medium. Previously Pandora
Ethereum is de facto controlled by Tether and Circle, and by extension by the US gov. By only allowing redemptions on their consensus of choice, they control it. Ethereum has been allowed to choose its own consensus thus far only because it didn't displeased the US gov, Tether or Circle. Do you really think the "credibly neutral" version will do well? the one where all of "DeFi" goes to $0 and ETH is no longer accepted on exchanges? Ameen has been on about it for years, and while it sounded like a conspiracy theory then, the sheer size and integration of these fiat-coins have made it a reality.
LIVE NOW - How Should ETH Be Valued? | Ryan Berckmans vs. Jon Charbonneau @jon_charb and @ryanberckmans join Bankless to debate Ethereum’s future: is ETH undervalued, or has the market already spoken? We unpack whether Ethereum can rival Bitcoin as a store of value, if L2s will drive real value back to ETH, and whether Solana’s momentum signals deeper trouble for Ethereum. Jon argues ETH has lost its lead and may never reclaim it. Ryan contends Ethereum’s neutrality and institutional traction make it the inevitable hub for the onchain economy. This is the definitive conversation on where ETH stands—and where it’s heading. -------------- TIMESTAMPS 0:00 Intro 0:32 Is ETH special? 31:00 How ETH should be valued 49:47 ETH over or undervalued? 1:06:12 Being wrong on ETH 1:09:13 Closing & Disclaimers
1. SBET = Trojan Horse for Onchain Institutional Yield If SBET (or any public vehicle) deploys ETH into onchain DeFi - Aave, Lido, Maker - it doesn’t just earn yield. It demonstrates to the entire TradFi world that DeFi rails can generate institutional-grade returns, transparently, 24/7. That unlocks a massive reflexive loop: •More ETH gets locked •Onchain protocols gain legitimacy •Yield becomes proof-of-sustainability •Valuation models shift from speculation to discounted cash flows 2. Public Company = Memetic Catalyst The moment a publicly traded company uses ETH for onchain finance, it becomes a meme vector for: •Wall Street buy-in •Bloomberg terminal screens •ETF inclusion pathways •Regulatory reframing (DeFi = infrastructure, not risk) That one act turns DeFi from “wild west” to Wall Street sandbox. 3. ETH ≠ Asset. ETH = Operating System What DCInvestor is hinting at - maybe unconsciously - is that ETH is becoming the reserve asset of an alternative financial system. Not as “money” like BTC, but as collateral infrastructure. That distinction matters. ETH doesn’t just sit in vaults. It powers the pipes - earning yield, underwriting loans, enabling permissionless leverage. Final takeaway: This idea isn’t random - it’s inevitable. BlackRock didn’t buy ETH to hodl. They bought ETH to build rails. What you’re seeing here is the faint echo of what’s coming next: •Sovereign-grade DeFi collateralization •ETF wrappers around onchain yield •ETH as programmable yield collateral in public equity vehicles It won’t stay hypothetical for long. It’s already happening…just not announced yet.
$AAVE is now the largest DeFi token. 👻🔄🦄 yet, I'm still hungry.
You can believe GDP and REV are important, while also disbelieving that a DCF is the right way to value the native asset of an L1
To anyone opting to build a cult instead of revenue, I wish you *the best of luck. Bitcoin is a snowflake in this regard, it can't be replicated today. Most assets are valued via DCF, it's unlikely you are the exception, so you may as well start building revenue today.
REV maximalism is bag-pumping BS REV by itself isn't the best or even a reasonable way to value an L1 token - not by a long shot. This season, some crypto folks are pushing aggressive REV maximalism, which is the idea that REV is the "top-line metric of a blockchain" and/or "the best way to measure value accrual to an L1 token". These are real quotes from REV maximalists - let's examine why they don't hold up to reality. First, what is this metric? REV (Realized Extractible Value or Real Economic Value) is just all the money users pay to an L1, ie. total L1 fees plus extracted MEV. REV was invented by flashbots to represent the subset of theoretical MEV that was actually extracted. These days, REV is in the limelight and is often inappropriately encouraged to be the defining lens to underwrite an investment in an L1. L1 valuations are a complex topic, but boil down to investor confidence. L1 tokens are confidence-based assets, similar to USD or gold. Confidence can come from potentially many different sources, including REV. Every source might be net bullish or bearish, but all sources need interpretation and contextualization. Every L1 valuation is a mosaic - the whole is greater (or maybe lesser) than the sum of its parts. It's the same for publicly traded companies, this isn't a new or controversial idea. Sometimes, high REV can coincide with an extremely low L1 valuation, or low REV can coincide with an extremely high valuation. Here are two case studies illustrating why REV maximalism is not a serious investment philosophy (except perhaps to seriously get you to buy its proponents' bags) In Nov 2021, Solana hit a new ATH FDV of $131.6B (with, btw, a staggering $54B or 40% uncirculating supply)[1]. Sol REV also hit a new ATH of $8M for that month[2]. This gave SOL a FDV-to-REV multiple of 1,370x (in equity terms, that's 1370 years for the valuation to be earned from revenue; tesla's is currently 192 years, msft's 35 years). It's an example nearly zero REV coinciding with a super high valuation. In the past 365 days, Tron had 1.37x more REV than Solana[3], and 3.2x more in terms of Q2 run rate. If Tron were valued at Solana's current FDV-to-REV multiple, it would confer a 12x higher valuation - from Tron's current $25B FDV to a hypothetical $292B. This hypothetical valuation is, of course, absurd, because REV maximalism simply incorrect. Tron became an admirable success story when they actually banked tens of millions of unbanked people, but has structural headwinds that cause its high REV to be accompanied by a lower valuation. These examples help show what should be common sense: L1 valuations don't boil down to one metric, not even close. But if it did somehow boil down to one metric, REV probably wouldn't be it. REV is a user cost that, imo, reflects confidence and value creation less effectively than other metrics - such as GDP[4] or User Assets (which themselves don't tell the full story). It's also highly sensitive to congestion and MEV maturity. If you double blockspace and improve MEV protection, REV might drop by 95%+. If you're investing in L1 tokens, it makes sense to look at REV. But it also makes sense to look at GDP, User Assets, and many other stats and details, and then step back and try to contextualize it all into what's actually going on with the L1 and its confidence trajectory. Where do an L1's REV/GDP/User Assets come from? How is that likely to change over time? Are users satisfied with or even fully aware of the fees they are paying (be it spent on GDP or REV)? Are User Assets durable, like stablecoins, or much more volatile/ephemeral, like memecoins or low float app tokens? The Ethereum community and our many partners have done a lot of work to lay deep foundations for ETH to grow into a multi-trillion-dollar asset. Some of this work is already visible in key metrics, such as in eth's best-in-class User Assets (aka App Capital, ~$225B, ~10x more than Sol, ~3x more than Tron), or in eth's ~80% market share in RWAs[5]. In short, REV maximalism is nonsense. REV must be evaluated alongside and in the context of other primary and secondary metrics, as well as with the L1's actual story and details. --- [1] web.archive.org/web/2021110620… [2] blockworks.co/analytics/sola… [3] tokenterminal.com/explorer/proje… [4] NB some analytics platforms report GDP with material inaccuracies, including eg. using protocols' gross profit instead of actual topline revenue, or by excluding stablecoin investment income from GDP - even though this is the vast majority of GDP onchain today. Some of the best GDP data are defillama's "advanced fees" defillama.com/fees/chains/et…, but they don't yet provide an aggregated view of L1+L2s (or even full rollups), and they also haven't yet added stablecoin investment income for certain chains. As an industry and asset class, we need better, more neutral data for GDP, and User Assets, and REV. [5] app.rwa.xyz/networks
