DeFi Dad: Why Ethereum Will Dominate The Next Bull Market (TLDR)

[00:00:00]What does the DeFi Dad portfolio look like? Is it like you got some real estate, some stocks, crypto, alternative investments?

[00:00:06]>> I'm a pretty simple person. I mean, I we have a family and and uh we we own a home thankfully and and then I I am still I think Nomadic was posting about this recently just >> I am still very uh long crypto, irresponsibly long crypto. Um, I actually am very comfortable too in this setting. Like this is a to me this is your your normal four-year uh cycle playing out. Yeah. I uh I I know everyone wants to debate that it's not playing out exactly the same way, but I'm like it looks the same as the last one.

[00:00:41]>> All the people all the suits, for lack of a better term, came on both of our shows end of last year and basically said this like the four-ear cycle is uh not going to happen, right? They were like it's over. It's over. It's like >> Yeah. Yeah. We did too. And and don't get me wrong, I want us to move beyond this. I I want us to >> uh get beyond this this again this whole thing playing out where we have to draw down you know not just 50% but like I think on average like 70 to 90% across different assets. Uh but I think the main the big difference is today so like maybe going to like more of like my ETH bull thesis. Um, and I I remain extremely bullish on Bitcoin as well and mentioned Hyperlquid and so forth. But in terms of uh Ethereum, Ethereum continues to be the most reliable and secure network for DeFi. Uh there's other networks that clearly host their own DeFi ecosystems. I think that'll continue to play out, but Ethereum has clearly had, you know, real network effects play out in its favor.

[00:01:48]the thing that's happening right now and we we just did an interview with Robert Leshner which I'm I'm hoping we get out in the next day or two out of editing.

[00:01:57]>> Uh we were talking about all they're doing with Superstate and obviously his focus is on uh tokenizing real world assets and then bringing them on chain and and I actually I think you know Robert is uh very dependent on Ethereum.

[00:02:13]I think like more than threequarters of all their liquidity is on Ethereum, but they are on other chains as well.

[00:02:20]The asset issuers need to be confident that nothing will ever happen to the assets they are issuing on these networks. And the track record is a 10-year track record for Ethereum. And so anyways, as all this is playing out, the more important story to me is that you, me, Robbie, Nomadic, all of us have lived through this era where it's always Bitcoin is number one, Ethereum has been number two, Salon has had a hell of a last few years, Hyperliquid is now, I mean, Hyperlquid is clearly top 10. I I think what's changing is we don't need to see all of the liquidity in like tokenized Bitcoin and and uh just ETH and just like soul and and hype. We're going to see real real world assets finally eclipse all of this.

[00:03:13]>> Yeah. On chain, right?

[00:03:14]>> And I think it's hard, >> right? It's hard for us to accept because to be fair like we're we're long these assets so we want them to go up but no one ever said that we needed to bring trillions on chain and that >> you know my my ETH doesn't need to be worth trillions to host trillions on day one right >> that said I do believe that if we can bring on you know trillions tens of trillions um clearly over time that network becomes more and more valuable.

[00:03:47]The the underpinning of all of its security is uh ETH staking. And so yeah, ultimately I I just don't see a world where uh I think as Tom Lee put it, can you imagine a world where you try to explain that the US dollar does not benefit from all of these uh stock exchanges that exist here? you know, oh, Google trades here and Nvidia trades here and and the argument being made, well, the US dollar doesn't benefit from this at all. And again, different that's a medium of exchange versus more of a >> store of value that I think ETH is. And so, I I think it's silly and and you have to get outside the crypto Twitter sphere to understand this. I I still I love our community. I love being able to like see all that you guys are posting and sharing and and you know all of our other peers.

[00:04:36]>> But that's not really what moving >> that's not the only conversation out there. Like there's a lot of folks with enormous amounts of capital who are they have very simple thesis about this space. You know, they're like, "Hey, Bitcoin looks like it's working to me.

[00:04:53]It looks like digital gold. Oh, there's a quantum threat. Okay. I mean, like, is it like something that's going to bring down the network tomorrow? Um, I'm worried about that, you know, like like long term, but >> again, Wall Street is not looking at it with the same sort of skepticism that our our community is. So, >> uh, actually, I have a question from Edward. He's a big ETH bull. He said, "Defi Dad, when you say security is Ethereum's main main selling point, ETH's main selling point, normies will point to Kelpa, exploit, a others, and say there's still a lot of risk in DeFi.

[00:05:26]How can ETH bulls respond to this?

[00:05:28]>> Okay. Yeah, we've been talking a lot about this. I I agree. It's it's been kind of a dark year for DeFi and and a lot of that has to do with the fact that uh there are exploits that are clearly happening because uh AI tools are being used to uncover vulnerabilities. I mean, this this whole Zcash thing to me was really really scary because they're they're an enormous network and like I get worried like what if this happens to other blockchains, any of them, right?

[00:05:55]So what I think we're missing is that uh things tend to uh normalize over time.

[00:06:03]What what I expect is that all of the like dismal sentiment around uh what's the next exploit and of course like uh by the way like what happened with like Kelpdow is I believe it's a failure in my opinion it's a failure of layer zero architecture. there was a true hack there. But like Zcash being to me much scarier, I think we will eventually get to a place sooner than later where uh those same tools are going to ultimately shore up all of this security like we're going to ultimately be able to ensure that we don't have these sorts of exploits. Great example is uh uh Nomadic and I are are um you know uh very close with the fluid team. We try to stay on top of everything because we are power users above all else. I am most concerned about the security of these protocols cuz I'm storing uh you know a lot of capital in in these protocols.

[00:07:00]And so >> every time a new model comes out with Claude, they're running that model with I I believe like they're running some sort of agent and they're looking for vulnerabilities >> like honeypotss across the entire DeFi landscape. So this sort of thing I think is going to like you know continue to play out and you know I >> I have uh heard a rumor that the Ethereum Foundation got access to mythos and has run that. Um I I cannot verify it like you know because I the the source that told me it >> basically it was like one of those things like I'm telling you this but like >> I can't like I can't tell you more.

[00:07:38]>> Yeah. Yeah. I know that I believe Salana also got access to this or at least they either they either had like they either were public about it or again it's something else that I've heard through the grape vine through the rumor mill.

[00:07:51]Um and I have no no doubt there's others out there. So you know again it I know it's been dark this year. I' I've seen a lot of like, oh, you know, you're like leading these folks to be slaughtered by these exploits. And I'm I'm like, >> I'll just, you know, say that >> I am as invested as I've ever been in DeFi. Uh there's lots of landmines. I think it's important that we really uh think about what has been stress tested over the years, but then again, don't assume that that's a >> that don't assume that something cannot be exploited. You know, I think what happened with a they didn't get exploited, but ultimately they the markets were, you know, taken advantage of because of a failing of layer zero and and of kelp and and of a too. What am I saying? I I don't >> to a risk management. Yeah.

[00:08:43]>> To their risk management. So, you know, anyways,