The Trillion Dollar ETH Pitch | RSA+DH

The Ethereum ETF is coming. So what is the best narrative for ETH, at least for TradFi, for Wall Street? Welcome to another Bankless Takes. David, we're gonna have a pitch off today. What's in store for today's episode?

We're gonna do what I think Bankless does best, which is help define, help shape the narrative for ETH, but this time for an audience that we don't typically talk to when we pitch ETH. We have, I think, previously talked about how to pitch ETH to the crypto native, to the people who really get it. Uh, but what about the people who just want to understand why they should buy the Ethereum ETF, which means they're not taking self-custody. They don't necessarily appreciate the value of self-custody. They also uh have a very diversified portfolio, and they're generally from an older generation. So, how do we pitch ETH to these people, the this cohort of uh what is a very large investor base? We're gonna discuss on the episode the seven different leading ETH narratives, and then Ryan and I are gonna have a competition where each one of us has presented a pitch that we are going to pitch to each other and also you, the bankless nation, and then bankless citizens get a role here that you guys, if you are a bankless citizen, you get to vote on who who had the better pitch. Winner gets bragging rights, which I'm sure you're familiar with bragging rights are, but bragging rights is also a one-of-one PoAp NFT that we're going to make our designer, our designer is currently designing. Uh, and either Ryan or I will be the holder of the bragging rights POAP NFT as a result of the Bankless Citizens vote. And I'm I'm I would like to say, if from peaking speaking from how I feel, I do not want to be the non holder of the bragging rights POA app. I would like to be the holder of the bragging rights poap. That's just how I feel.

David, not gonna lie, man, I'm a little bit nervous coming to this episode because uh I've seen you train for fights before. All right. I saw I saw you train for your Nick Carter fight, and it was like day and night for like months, getting like beat up in the gym, like coming on these episodes, bruised and beaten. So God knows what you had to do in order to construct this uh narrative pitch. I prepared mine, full disclosure, I prepared mine about an hour before we started recording because I procrastinated.

Last minute homework doer.

I left at the very last minute. I thought it would be easy, but it's hard. It's actually hard to get a simple, coherent, like one to two minute pitch down for ether the asset. It's kind of like there's so many things you can say about Ethereum. That that is the art of this.

And this actually goes back all the way to I think a tweet that really inspired this whole thing from Eric Balacunis, who tweeted out one of the challenges for Ether ETFs penetrating the 60-former boomer world is distilling its purpose and value in an easy to understand sound byte. A la Bitcoin is digital gold. Does a simple one-liner exist like that for Ether? What is the Bitcoin is digital gold one-liner for Ether? Now, this is we're gonna give a 60-second pitch, so much more than a one liner. Um, but this is the beauty of Bitcoin, and I also think the beauty of Ethereum is that you know Bitcoin is so trivially easy to understand that you can put it into a uh a one line sound bite, and Ethereum is so incredibly sp expansive that you kind of need a 60 second pitch. So we're doing the 60 second pitch um uh format here today.

Dave,

is your is your hope though that we can get this to one a one sentence soundbite? Because you sort of need to in order for a meme to travel, like one single line.

I think the Ethereum one single line comes from a more general, broad understanding of what Ethereum is.

Good

Does the internet does the internet have one single line? I'm not sure it does.

retort. That's his retort.

But that's just because like everyone knows what the internet is.

Yeah. And and I'll say that going going into this episode. I think that there will be eras or seasons where different lines are more applicable than others. Like so in the 1990s, internet, when you're trying to explain the concept, you might have said something like, the internet is e-commerce, right? And that would have been accurate. And that would have been one sliver of it, but obviously just a small segment of the total value that the internet would would eventually drive. And the internet became kind of like a bundle of multiple different use cases. I see, I see this very similarly with Ethereum, where there will be eras where one meme or one one-liner works and that will fade out and another will supersede it, uh, or that will fade into the background and like we'll have different uh narratives every couple of years. In fact, David, that's actually been a Bitcoiner uh charge, uh like Bitcoin Maximalist charge of Ethereum over the ages, which I I think is uh somewhat interesting, which is like you guys keep changing your narrative. I thought it was this and now it's this. And I think the answer to that is is mostly no.

It is that, and it is also this.

It's yes and. It's yes.

Yes, it's yes and.

So the pursuit of uh defining all of the narratives started with a tweet where I labeled some of the first four that came to my head: uh digital oil, internet bond, programmable money, tokenization platform. These are definitely some of the narratives that we've put out here at Bankless. Uh, and then after this tweet, I went on a hunt for even further validation of some of these same narratives and also adding new ones into this list. So I've come up with seven different perspectives, seven different angles. It's really six and a half uh of ways of viewing ether the asset, and in no particular order, but uh I did start with Ethereum as a tokenization platform first, because I want to introduce that one as one of the most new and novel perspectives of the ETH pitch. Uh, when you and and I would write the ETH pitch, Ryan, we wouldn't really talk about Ethereum as a tokenization platform because if you're gonna if you're gonna sell Ether, it's weird to start talking about Ethereum. You and I have been so focused on Ether, the asset. Uh, but I don't think that nuance really matters if you only have 60 seconds. So talking about what Ethereum does and talking about what its native currency Ether is is almost synonymous for people who are actually kind of a naive to the fact that there is a difference there. Ether, Ether and Ethereum is basically the same thing. And tokenization as a candy line, as like a nerd snipe, as something that is enjoyed by many, many people. I think tokenization has broad appeal. And this is the perspective that Zach Rhines, Chainlink God, puts into perspective here, where he says every single financial asset in the world will be tokenized on chain. Tokenize the world, tokenize everything. This has been a meme that has persisted across all crypto cycles. He continues, there's no longer a question of if, but a question of when. Larry Fink, co-founder and CEO of BlackRock, has spoken publicly on numerous occasions about this inevitability. When regulatory clarity continues to be a pain point, Larry got both Bitcoin and ETH ETF approved by an anti-crypto SEC. Beyond that, BlackRock has launched its own tokenized fund on Ethereum Mainnet, now at half a billion dollars AUM, invested in Circle, which issues USDC, invested in Securitize, one of the leading tokenized asset issuers, and used both Circles and Securitize TechStack to issue Buildle. Is that there's no doubt in my mind that Buildle won't be the last fund BlackRock tokenizes on a public blockchain. Okay, so really leaning into the tokenization platform of Ethereum and also using the credibility of BlackRock. And Larry Fink, he's not a crypto native. He has like Boomer customers. Yes. And so I think it's it's worth taking a leaf out of his book to understand how he is using and also pitching uh ETH to his customers. And so Ethereum as a tokenization platform, I think, needs to be a pretty core component of what any typical pitch about ETH is to TradFi.

Okay, so that is the first of seven narratives that you think are contenders to be one of the key narratives to explain this, to give your 60 second uh to one minute to two minutes, because David spoiler alert, I think mine's closer to two minutes now. Yeah, to give me some grace there. But like uh a tokenization platform, this is not usually the pitch you're saying to crypto natives, but might be like much more red uh resonant to to TradFi. And indeed, it was certainly that the pitch Larry Larry Fink has given. And of course, you know, the customers of Larry Fink are going to be the you know the the buyers of ETFs, right? Um

BlackRock is one of the main issuers of the Ethereum ETF. They're they're the leading issuer for the the Bitcoin ETF in terms of AUM. So like you'd think this guy knows how to sell it. So tokenized tokenization platform, it's not exactly going bankless, is it? But it is something that Ethereum provides, and maybe that's the leading narrative uh for this platform.

Totally. And I think we all kind of felt something in our in our hearts when we I learned about the idea of tokenization. And so it's it's also rem reminding people that like let's go back to your first days in crypto and like what really got you excited about crypto and tokenization, the idea of tokens is definitely up there.

Well, you know, one thing I used to say when I was uh l new to learning about Ethereum is that Bitcoin was a mono asset platform, just one asset, just Bitcoin, and uh Ethereum is a polyasset platform, multiple assets. Uh so that that is a similar idea to tokenization, I guess.

Let's go into narrative number two, angle number two. Ethereum is an app store. And this is coming out of Jeff Dorman, who put out a tweet saying, attention, BlackRock, Van Eck, digital assets, and Bitwise. Once the ETH ETF goes live, please erase the words supercomputer, ultrasound money, internet bond from your memory. This does not resonate with anyone. What does Ethereum is an app store? And this is an angle that I've seen many people take. Ethereum is an app store. And it's it's again something that is familiar to people who do not have a crypto background, who don't know what Ethereum is. And so it's important to know that if we are pitching ether to people with very little familiarity about what's going on in our world, then we need to pull some knowledge from other corners of their brain that they already have, pre-existing knowledge. People know what an app store is. People know what a developer platform is. The idea of Ethereum as a tech platform that grows the more code is written and the more that developers build applications on it. That is something that is familiar to them. And we can like debate about like, well, is Ethereum really an app store? And I think if you go down into the nuances, we're missing the forest for the trees. Like simply put, it's a developer platform just like the app store, and it grows in utility over time, the more developers there are.

I I saw we we saw on a roll-up recently, Van Spencer pitched this pretty effectively in a conversation with uh Bloomberg where he um said Ethereum is an app store, and then he mentioned some of the various uh apps. And there was like this um this slide shown on screen where it showed like Ave and like compound and maker and basically all of these different logos for the the types of money apps. So I think that there is some familiarity there, and you can like point to actual apps that are deployed on the Ethereum app store and say, oh, you want a collateralized loan, go here. Oh, you want a stable coin? Here's USDC, go over here. Oh, you want a like a payment app, go over here. And so I do think that is uh pretty resonant. And as you say, David, like everyone knows what an app store is. Is there a human alive that you're pitching an Ethereum ETF uh to that hasn't used the app store, that doesn't have like dozens of apps on their on their smartphone, right? Like none of them. So this is a schematic that that kind of works and links to the last very successful compute revolution, which was the mobile revolution, and just like Ethereum could be as big as the iPhone, you know, uh it it it calls into into uh mind that.

I remember when we had Mark Cuban on the podcast during the middle of 2021, he was talking about giving us the perspective that he had where he was sharing with some of uh some of his friends that of his age who had downloaded Coinbase and was asking Mark Cuban, like, hey, where's like the DeFi apps? Where are all the apps? Uh thinking that there was like an app tab in the Coinbase app, not understanding that it's actually a little bit like it's one dimension larger than that. Uh, but people are ready for this. Like people are ready for the app store perspective. They just they, you know, you in order to be perfectly accurate, you kind of have to tweak it and get a little bit more educated. But people are so ready to think of Ethereum as an app store.

They are ready for that. The way that the weakness of this uh narrative, I think, is it it quickly falls down when you're they're like, where's the app store? You can't like point them to one central location to go like download their their app or go look at the reviews or you know, just click and start using. It's just it's much more like the internet where you have to export on your own and there's rough edges. There's not one central, pristine app store type of experience brought to you by like some uh commercialized UX uh you know uh champion of the world. It's just very rough.

I do agree with you that that's where the metaphor breaks down, but we also have to remember who the audience is. The audience is buying the ether ETF, which you cannot use in any of the apps.

Oh, they're not users. So we don't have

They're not users. They're not on they're not custody.

Yeah. And so like they're like, oh Ethereum's an app store. Great. I'll buy it. Like not consider like they're not actually going to like take it to the apps because they're buying the ETF. And so they just want exposure. Which is great. Which is so like you can use some of the lack of sophistication of crypto nativity to actually make this pitch, I think, easier, not harder.

Okay, so that's number two. Ethereum is an app store. What's number three, David?

I called this a six and a half, not seven. Number three, this is coming from Ryan Rasmussen out of Bitwise, who says Ethereum is an operating system and an app store for crypto applications. So really adding the operating perspective here to the Ethereum pitch. And I think this is where we also get the opportunity to really differentiate Bitcoin and teach whoever is hearing these pitches and give them a little bit stronger foundation. You know, Ethereum is not digital gold. Bitcoin just does Bitcoin. It doesn't hold apps. It just is Bitcoin the asset. Ethereum is an operating system and a developer platform. And that's also what many of the other blockchains are like. Like this is where uh Pomp, when he was on like fast money, talked about like all the other smart contracting platforms that are out there, you know, Ethereum, Solana, like all the other ones. Uh and so you could you can also gain some assurances, some confidence in whoever you are pitching this to by their ability to be familiar with like the idea of, oh, Bitcoin is separate and it's unique because it's just digital gold, it's just an asset. But Ethereum is an operating system, which is something that you're familiar with. And you build apps on it, which is something you're familiar with. And so I think leaning into the operating system that is Ethereum helps embolden the tech platform angle that I think we definitely want with Ether. And also I think helps people become more familiar with the landscape of all the entire crypto applications or crypto platforms.

I know coming into this you asked, hey Brian, do you have uh another one to add to this list of seven? And I I told you I didn't have one, but let me just add one now because you this is maybe a half step, right? You're just saying rather than just Ethereum is an app store, Ethereum is an app store, it's an operating system as well. Let me give you the full uh a full step, which is maybe a separate narrative. What about Ethereum as the the internet of value?

And this this is kind of like the idea that rather than just an operating system, it's kind of like the internet, only for things that have value. And so it's let it's more rough, it's more rugged, it's more, you kind of have to surf it and browse it and that sort of thing. And it's permissionless. Anyone can deploy to it. I think that is similar to the app store, but also different because the internet is not just a sandbox, you know, constrained by by one company with like this walled garden type of uh environment, but it's like much more freeform. Like anyone can deploy, anyone could expand to it. So maybe maybe that's another narrative that gets us the the full seven here, David. But it's pretty related to this operating system or app store type of idea. Ethereum, the internet of value.

Totally. My commentary on that one would be it definitely uh fits and it's a more pure representation, and I like it. It's a little bit more crypto native, but then we've also moved away from familiarity. Like internet of value is another way to say, like operating system that's a little bit more true to what Ethereum is, but then you also lose some familiarity and some like pre existing knowledge. And so I think that's something that like a somebody hearing this pitch could get to an aha moment about. But I think if I'm just like a 60, you know, 60 year old person with like my savings, and you're pitching me uh a blockchain app store versus internet of value, I think blockchain app store is going to be a little bit more resonant.

I I agree too. Like internet of value s feels so amorphous, right? Like what is value anyway? That word value, like um it's almost like internet of assets might be better. But let's go to number four. What's number four?

Number four, ETH is digital oil. Now there's there's one of these uh pitches that I'm gonna say we should not definitely do. And there's pros and cons of all of these pitches. And so I'm not gonna say that Ethereum is digital oil is like the perfect pitch, but it's definitely worth talking about as a perspective. Uh especially if we are really looking for that like one liner that Eric Balchounas was really asking for. If Bitcoin is digital gold, then what is the commodity? What is the resource that Ethereum is? Ethereum is digital oil, it's literally called gas. It is the thing that funds and powers the application that is on Ethereum. When you make a transaction on Ethereum to do some app, some somebody's computers somewhere in the world starts flops. It starts doing some flops. It's actually starts doing some computation. And you need to consume ether, you need to consume the oil to power those crypto applications. Uh and so is it's not perfect because it's going to develop a lot further questions. But in terms of just like if we're putting thing things into like perfect commodity like resources, oil, I think, is the correct comparison for gold. So Bitcoin is digital gold, then Ethereum is digital oil.

For the ETH bulls, it also has this nice property in that it's like uh almost a 7x larger than the uh total market cap of gold. So gold market cap is about 17 trillion, at least according to this estimate right here. The market cap of oil, if you multiply uh you know all the book barrels of oil by about $70 per barrel, you get 115 trillion.

So a lot larger than oil. And and certainly um oil being kind of a consumptive good is uh is certainly resonant with the idea of gas. So bigger market cap, the idea of of gas. I mean it's a pretty it's a it's not bad. You're not talking about Ethereum the network in this case, though. You are very squarely talking about ether the asset or just ETH.

Yeah, exactly. And it it even though it probably generates further questions and a little bit of confusion in your listener, it at least puts them in the in the frame of mind as like, well, you know, from from some perspectives, ether is meant to be consumed. Like you are supposed to burn ether to use the applications. That that is its purpose. And some people like the productivity and the GDP association that that comes with like some crypto asset being uh being oil. A lot of people don't like the idea of a deflationary asset. Like they have been trained to think that money should inflate. They have been trained to think that uh an inflation based economy is it produces uh is better producing of value and resources. And so some people just resonate with the idea of oil, I think, more than a than a gold or a fixed market cap asset.

It does also, now that uh Ethereum does have the burn in place, right? It does kind of map nicely to you you have to burn oil in order to get things done, and you have to burn ETH in order to cause movement, cause you know, pay for transactions on the Ethereum network. So that's nice as well. I'll admit that from for myself, David, I've ebbed and flowed with um respect to this narrative. Like there are times where I'm like, yeah, yeah, that's right. And other times where I'm like, I hate this narrative. Like, this is worth it. Ethereum's not oil at all. It is a a non sovereign store of value in the same way Bitcoin is. It's kind of like a money. So I've gone gone back and forth on this. But I feel like full cycle, when I zoom out and look at the context, it's not bad. I kind of like this uh Ethereum is oil or Ether is oil.

Okay, we're starting to get into what I would call some of the worse narratives that are still helpful. Uh and so worse maybe for like presenting ether as a first time to a first timer, uh maybe these are narratives start to come in further down someone's journey of understanding ether. And worse

For TradFi specifically, is what

Works for TripFi, worse for the current audience. Yeah. This is a narrative uh that we're about to present that I think Bankless, you and I have thoroughly enjoyed, but it has come after just years of like education and perspectives and exploration of what Ethereum is. And that's Ether as an internet bond. If we have the Ethereum stake rate at what is it now, 3.2% for this internet native store value asset that's used as a collateral in DeFi, well, the most risk off thing you can do that's also highly exposed to the crypto economy is buy ETH and stake it.

Buy your crypto asset, buy your money, buy your digital oil, whatever, stake it to Ethereum, and you get the internet bond. You get the bond, the stake rate of of ETH. And since you know, Ether, the asset, is the foundation of so many applications in the DeFi landscape, the internet bond is the yield rate that transcends all of DeFi. Uh this one once again definitely requires some prerequisite knowledge to really um make this uh angle uh resonant with people. It definitely also requires understanding what DeFi is and how Ether is a money in DeFi. Uh, but this is one that we've enjoyed. Uh and the I know that crypto natives also enjoy it the more that they understand Ethereum as a financial system.

Okay. Yeah. I also enjoy it, David. So there's lots of good things we could say about it. Like it's definitely a differentiator from Bitcoin, and and uh the key like uh ability to stake ether is kind of much different than than Bitcoin. It's also you get to comp it to like what's the value of sovereign bonds uh around the world? Something like 70 trillion. Okay. And so the idea of Ethereum being sort of like a nation state, only a network state that secures property rights, like we could geek out on that for many episodes of Bankless, and indeed we have. So the parallel, the parallels, and the analogs are really good here. And so I I definitely like the Ether as an internet bond for a crypto native audience who's really deeply trying to understand.

How we're securing property rights inside of these crypto economic systems. That said, I totally agree with you. It is like among the worst narratives to present to uh TradFi and an ETH buyer, not least of which because they don't get any yield in uh Ethereum ETF right now.

Yeah.

Like

Yeah.

all they get is the asset, right? So they can't even uh they can't even stake this. And when you say internet bond, what like what do you actually mean? A bond of the internet? Like they're not.

Because a bond is supposed to come from a government or

Exactly.

a

corporation.

Exactly. And they haven't listened to, you know,

dozens of big uh big bankless episodes telling them why this is like similar to uh you know nation state. And so it requires too much in in terms of fundamentals to easily articulate this to somebody with Wall Street knowledge.

All right, second to last. I think this one is actually a pretty strong one, but again, not necessarily something I would lead with. Programmable money. And this I want to note that this tweet is from 2019. This tweet from Eric Connor. He says, the original Ethereum vision of programmable money is the strongest narrative and the one that will translate best to the mainstream. Quit looking elsewhere.

Programmable money. If Bitcoin is digital gold, then Ethereum is programmable money. And the this gets into the idea of like smart contracts and an app store, because like, you know, apps are programs. And then Ether is the money that goes through the programs. It also alludes to the fact that, like, well, there's other crypto assets out there that aren't programmable. Oh, yeah, that's Bitcoin. Bitcoin, not programmable, ether programmable. And I don't think this really helps it deliver an all-encompassing vision of Ether or Ethereum, but it does. It's like I think the only way to really get at what is Ether, what is Ethereum, is from so many different angles, right? That's why we're talking about seven different angles. And this is a very valid one. This is a very simple one. You already know Bitcoin. You already know it's a digital asset on the network. It runs on a thing called a blockchain. It's ether is the same thing, but it's programmable, implying that Bitcoin's not, and implying that you can do things with the programs.

Yeah, I I I do like this. It it does resonate with me. However, I I feel like it misses something in communicating the ETH narrative um to the audience, which is like