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Today marks 3 years since Ethereum’s Merge. One of the biggest technological achievements ever.
A network securing billions in assets switched from Proof-of-Work to Proof-of-Stake with 0 downtime.
The effects?
- Energy use ↓ 99.8%
- ETH issuance lower than the Gold mining rate
A network securing billions in assets switched from Proof-of-Work to Proof-of-Stake with 0 downtime.
The effects?
- Energy use ↓ 99.8%
- ETH issuance lower than the Gold mining rate
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Had a great week at Devcon in Mumbai - but it also feels really really good to be back :)
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I want to sharpen my own thinking around why I think ETH has the potential to become the best SoV in the world.
Would love to hear arguments for/against any of my conclusions!
First things first - at it's current stage, I cannot confidently call ETH the best SoV, yet.
Why?
- eats are real
- Price action in the past 5 years was worse than other SoVs
BUT, imho it has the best chances to become the leading SoV.
The AI and PQ threat is being worked on full steam - the Ethereum community agrees that this has top priority.
Once Ethereum has successfully transitioned to post-quantum cryptography, I currently don't see any other asset with better properties.
This transition could quickly grow the assets adoption (esp. if cryptography of banks and tradfi start to fail).
When I compare ETH against other SoV contenders, I'm coming to the following conclusions:
ETH vs real estate
- reals estate isn't transportable (I cannot just bring it with me when I travel/move)
- real estate markets are more inefficient
- local factors might heavily influence the value appreciation/depreciation of my property
- upkeep costs are necessary (but generally lower than the generated rental income) and are dependent on availability of workers
ETH vs Fiat
- higher inflation (varies by country, but basically all have them)
- depending on the currency, there might be issues with accessibility
- one would need to pick a basket of currencies in order to diversify geopolitical risk properly
- dependent on decisions from central banks
ETH vs Gold
- gold is hard to verify, hard to break down into smaller amounts, and harder to trade in general
- you cannot easily transfer gold without a physical handover
- won't be useful to AI agents
ETH vs BTC
- ETH is programmable, which allows you to use your ETH natively on the underlying blockchain (Ethereum) whereas swapping/borrowing/lending BTC introduces additional trust assumptions (because Bitcoin chain is a ledger for token transfers and you'd have to go through centralized exchanges or other 3rd parties for more expressivity)
- Bitcoin is also working on PQ solutions (BIP-360 & BIP-361), but the migration path appears less defined compared to Ethereums more explicit and time-bound roadmap
- Bitcoin's fixed supply and declining PoW block rewards create an unresolved long-term security-budget question
Other pro ETH points
- it's programmable
- it's green
- it has the coolest brand (the logo is just amazing and goes with anything)
- it is productive (i.e. it can generate a native staking yield)
As mentioned, would love to discuss this publicly to sharpen my own thinking.
Also: never put all your eggs in the same basket. Even if one asset has the best "properties", it doesn't mean that the chance for success is 100% - there are always risks involved.
Would love to hear arguments for/against any of my conclusions!
First things first - at it's current stage, I cannot confidently call ETH the best SoV, yet.
Why?
- eats are real
- Price action in the past 5 years was worse than other SoVs
BUT, imho it has the best chances to become the leading SoV.
The AI and PQ threat is being worked on full steam - the Ethereum community agrees that this has top priority.
Once Ethereum has successfully transitioned to post-quantum cryptography, I currently don't see any other asset with better properties.
This transition could quickly grow the assets adoption (esp. if cryptography of banks and tradfi start to fail).
When I compare ETH against other SoV contenders, I'm coming to the following conclusions:
ETH vs real estate
- reals estate isn't transportable (I cannot just bring it with me when I travel/move)
- real estate markets are more inefficient
- local factors might heavily influence the value appreciation/depreciation of my property
- upkeep costs are necessary (but generally lower than the generated rental income) and are dependent on availability of workers
ETH vs Fiat
- higher inflation (varies by country, but basically all have them)
- depending on the currency, there might be issues with accessibility
- one would need to pick a basket of currencies in order to diversify geopolitical risk properly
- dependent on decisions from central banks
ETH vs Gold
- gold is hard to verify, hard to break down into smaller amounts, and harder to trade in general
- you cannot easily transfer gold without a physical handover
- won't be useful to AI agents
ETH vs BTC
- ETH is programmable, which allows you to use your ETH natively on the underlying blockchain (Ethereum) whereas swapping/borrowing/lending BTC introduces additional trust assumptions (because Bitcoin chain is a ledger for token transfers and you'd have to go through centralized exchanges or other 3rd parties for more expressivity)
- Bitcoin is also working on PQ solutions (BIP-360 & BIP-361), but the migration path appears less defined compared to Ethereums more explicit and time-bound roadmap
- Bitcoin's fixed supply and declining PoW block rewards create an unresolved long-term security-budget question
Other pro ETH points
- it's programmable
- it's green
- it has the coolest brand (the logo is just amazing and goes with anything)
- it is productive (i.e. it can generate a native staking yield)
As mentioned, would love to discuss this publicly to sharpen my own thinking.
Also: never put all your eggs in the same basket. Even if one asset has the best "properties", it doesn't mean that the chance for success is 100% - there are always risks involved.
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matze | growthepie 🥧 retweeted
“We want all the countries to have equal access, because that’s what the Ethereum ecosystem is about.” - @tobschcom
Tobi says @growthepie_eth stays free for everyone, since a subscription price in the US means something very different in India.
I asked him, how they keep useful.
> How is growthepie’s positive-sum idea playing out across L2s, and where do you still see competition?
> What has been the biggest challenge in making on-chain data clear for different audiences?
> How do you think about sustainable funding for an open analytics platform, and what has worked best?
Full Q&A👇
Tobi says @growthepie_eth stays free for everyone, since a subscription price in the US means something very different in India.
I asked him, how they keep useful.
> How is growthepie’s positive-sum idea playing out across L2s, and where do you still see competition?
> What has been the biggest challenge in making on-chain data clear for different audiences?
> How do you think about sustainable funding for an open analytics platform, and what has worked best?
Full Q&A👇
"Lots of stuff is based on narratives." - @web3_data
Matze says activity spikes when a narrative is hot, then dies down, while sustainable apps slowly grow and hold steady.
I asked him, how they build their data and what it shows about @ethereum
> How has growthepie's data evogrant days, and what has been hardest to get right? > What are the most surprising patterns in how users and value move across Ethereum? > How do you decide which new metrics and chains to prioritize while keeping the data accurate?
Full Q&A👇
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matze | growthepie 🥧 retweeted
3. Optimizing for ETH as SoV is aligned with decentralization and CROPS
Whenever I ask what people appreciate the most about Ethereum (as opposed to either other blockchains, or anything outside the blockchain world), the most common answer is: decentralization and CROPS (censorship and capture resistance, open source, privacy and security).
Decentralization and CROPS have a lot of value, even to institutions. For individuals, privacy is often viewed as an abstract ideology. For institutions, it's prudent risk management, data protection law compliance, and a number of other things. Likewise for security. And likewise for running your own node (enterprise buzzword: "on-prem deployment").
But what about for the ETH holder? Well, it depends why you're an ETH holder. If you want ETH to optimally chase financial trends and collect fees from them, then you want a Fearless Leader™ who bravely shouts on the socials that Ethereum loves [insert opportunity here] and will pragmatically reconfigure itself to give it explicit protocol support.
But if your primary reason to hold ETH is as an SoV, then you will be judging ETH by SoV-ish metrics. And what is the first and most important SoV-ish metric?
To survive.
That's what a big chunk of this last Devcon was about ("post-quantum and post-AI"). You want a chain that is taking conservative tradeoffs ("hash-only security, all formally proven, >3x more rounds than known to be necessary for security"). You want a chain that is aiming for at least partial ossification, where the great balance of work will move to higher levels of the stack once the core is complete. You want a chain that aims to minimize protocol politics, by having a very high bar before it accepts either precompiles that bloat the protocol or new kinds of in-protocol rewards that could get captured.
What other SoV'ish metrics?
The ability to easily hold it safely (hence, work on multisigs).
The ability to hold it privately (hence, kohaku work).
The ability to hold it privately *and* safely (hence, 8288 and private-AA workstreams already starting).
The guarantee that if you have coins, you can send them, and block builders can't stop you (FOCIL)
Minimized infrastructure dependence (basically the whole decentralization roadmap, including the fact that I am able to currently run a node on this laptop, and it synced in < 6 hours and takes up only 1/8 of my hard drive - better stats than in 2019!)
Now, are there "adoption" goals that are highly synergistic with SoV?
Very much so.
The more assets there are natively issued on L1, including both RWAs and native decentralized assets, the larger a set of things you can "do" with your ETH, the better. Being able to easily (including safely, trustlessly) convert back and forth between ETH and other assets, use ETH as collateral to do things with other assets, etc, all forms part of the utility of holding ETH.
There are still some conflicts between serving these use cases and decentralization (eg. we want to be careful about fast slots and impact on centralization), but on the whole much less than what you get if you maximize fees.
Conclusion:
The best social reason to care about Ethereum is because it makes decentralization and CROPS properties a reality for more people and uses.
The best private reason to hold ETH is its SoV properties, which are a direct consequence of that decentralization and CROPS.
Whenever I ask what people appreciate the most about Ethereum (as opposed to either other blockchains, or anything outside the blockchain world), the most common answer is: decentralization and CROPS (censorship and capture resistance, open source, privacy and security).
Decentralization and CROPS have a lot of value, even to institutions. For individuals, privacy is often viewed as an abstract ideology. For institutions, it's prudent risk management, data protection law compliance, and a number of other things. Likewise for security. And likewise for running your own node (enterprise buzzword: "on-prem deployment").
But what about for the ETH holder? Well, it depends why you're an ETH holder. If you want ETH to optimally chase financial trends and collect fees from them, then you want a Fearless Leader™ who bravely shouts on the socials that Ethereum loves [insert opportunity here] and will pragmatically reconfigure itself to give it explicit protocol support.
But if your primary reason to hold ETH is as an SoV, then you will be judging ETH by SoV-ish metrics. And what is the first and most important SoV-ish metric?
To survive.
That's what a big chunk of this last Devcon was about ("post-quantum and post-AI"). You want a chain that is taking conservative tradeoffs ("hash-only security, all formally proven, >3x more rounds than known to be necessary for security"). You want a chain that is aiming for at least partial ossification, where the great balance of work will move to higher levels of the stack once the core is complete. You want a chain that aims to minimize protocol politics, by having a very high bar before it accepts either precompiles that bloat the protocol or new kinds of in-protocol rewards that could get captured.
What other SoV'ish metrics?
The ability to easily hold it safely (hence, work on multisigs).
The ability to hold it privately (hence, kohaku work).
The ability to hold it privately *and* safely (hence, 8288 and private-AA workstreams already starting).
The guarantee that if you have coins, you can send them, and block builders can't stop you (FOCIL)
Minimized infrastructure dependence (basically the whole decentralization roadmap, including the fact that I am able to currently run a node on this laptop, and it synced in < 6 hours and takes up only 1/8 of my hard drive - better stats than in 2019!)
Now, are there "adoption" goals that are highly synergistic with SoV?
Very much so.
The more assets there are natively issued on L1, including both RWAs and native decentralized assets, the larger a set of things you can "do" with your ETH, the better. Being able to easily (including safely, trustlessly) convert back and forth between ETH and other assets, use ETH as collateral to do things with other assets, etc, all forms part of the utility of holding ETH.
There are still some conflicts between serving these use cases and decentralization (eg. we want to be careful about fast slots and impact on centralization), but on the whole much less than what you get if you maximize fees.
Conclusion:
The best social reason to care about Ethereum is because it makes decentralization and CROPS properties a reality for more people and uses.
The best private reason to hold ETH is its SoV properties, which are a direct consequence of that decentralization and CROPS.
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"Step one of winning is surving ~and making sure that we are fully secure with regards to post-quantum and AI~"
The priorities are clear - making $ETH the best post-quantum/AI SoV asap 🫡
The priorities are clear - making $ETH the best post-quantum/AI SoV asap 🫡
"Step one of winning is surviving… then the next step is getting Ethereum actually used at a much higher scale." - @VitalikButerin
Vitalik says @ethereum is making sure it is fully secure against quantum computers and AI, so it can scale into prediction markets, decentralized Os.
He also says private transactions that cost more than 300,000 gas today will get much cheaper and become quantum safe.
I asked him about the next decade of Ethereum.
> What used to be hard or expensive on Ethereum that will become easy and cheap in the next 18 to 24 months? > What becomes newly practical for users and builders over the next 3 to 5 years of lean Ethereum? > What does winning look like for Ethereum in the next decade, and what early signals would show it? > How does Ethereum's edge with institutions compound as more assets move on-chain?
Full Q&A👇
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My Devcon takeaways after a week in Mumbai 🇮🇳
A few observations, opinions, and some constructive criticism:
1. Institutional adoption isn't a business model.
Heard a lot of "we're focusing more on institutions now."
Sometimes that felt more like cope than a strategy backed ou've identified real institutional demand, amazing! Go after it.
But don't blindly pivot towards the next buzzword just because your previous business model isn't working.
2. The grant-funded era is getting tougher.
If your project historically relied on grants but doesn't directly contribute to CROPS, funding seems increasingly difficult to secure.
Speaking as someone who built a company that was heavily grant-funded in its early days: this transition isn't easy, but it's necessary.
My takeaway: start thinking like a sustainable business. Build something valuable that others (apps, ecosystems, institutions, agents, etc.) are actually willing to pay for.
3. It's not just crypto that's changing.
AI is fundamentally changing how digital businesses operate, including established revenue models like advertising.
If your business is struggling to adapt, remember: pretty much EVERY digital business is going through massive changes right now.
4. Ethereum is doubling down on its core values (CROPS).
Of the five priorities, I personally think post-quantum security is the most important, followed by privacy.
Good to see a clearer focus on the fundamentals.
5. Ethereum onboarding needs work.
We talked to lots of students at our growthepie booth. Many were completely new to Ethereum.
Would love to see a dedicated area at future Devcons focused on introducing newcomers to Ethereum and helping them find their way into the ecosystem.
6. Mumbai delivered!
Great food, great venue, great people.
And honestly, Mumbai was more walkable than many people made it sound (even though infrastructure still has some catching up to do).
I'll definitely be back! 🇮🇳
A few observations, opinions, and some constructive criticism:
1. Institutional adoption isn't a business model.
Heard a lot of "we're focusing more on institutions now."
Sometimes that felt more like cope than a strategy backed ou've identified real institutional demand, amazing! Go after it.
But don't blindly pivot towards the next buzzword just because your previous business model isn't working.
2. The grant-funded era is getting tougher.
If your project historically relied on grants but doesn't directly contribute to CROPS, funding seems increasingly difficult to secure.
Speaking as someone who built a company that was heavily grant-funded in its early days: this transition isn't easy, but it's necessary.
My takeaway: start thinking like a sustainable business. Build something valuable that others (apps, ecosystems, institutions, agents, etc.) are actually willing to pay for.
3. It's not just crypto that's changing.
AI is fundamentally changing how digital businesses operate, including established revenue models like advertising.
If your business is struggling to adapt, remember: pretty much EVERY digital business is going through massive changes right now.
4. Ethereum is doubling down on its core values (CROPS).
Of the five priorities, I personally think post-quantum security is the most important, followed by privacy.
Good to see a clearer focus on the fundamentals.
5. Ethereum onboarding needs work.
We talked to lots of students at our growthepie booth. Many were completely new to Ethereum.
Would love to see a dedicated area at future Devcons focused on introducing newcomers to Ethereum and helping them find their way into the ecosystem.
6. Mumbai delivered!
Great food, great venue, great people.
And honestly, Mumbai was more walkable than many people made it sound (even though infrastructure still has some catching up to do).
I'll definitely be back! 🇮🇳
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Ah almost forgot the most important point:
Everyone is on the same page to turn $ETH into a post-quantum SoV asap.
Everyone is on the same page to turn $ETH into a post-quantum SoV asap.
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$ETH will be a post-quantum store of value btw
If you’re looking for “ETH the asset as a product” cheat sheet, @growthepie_eth got you covered.
Help them spread the word (yes, I mean go click/tap that like and quote button), as it’s awesome work and much needed.
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matze | growthepie 🥧 retweeted
Last day at Devcon - last chance to visit our booth
Happy Diwali! Phir milenge!
Happy Diwali! Phir milenge!
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Come visit our booth if you want to chat Ethereum data 🫡
Last Devcon day today!
Last Devcon day today!
"Lots of stuff is based on narratives." - @web3_data
Matze says activity spikes when a narrative is hot, then dies down, while sustainable apps slowly grow and hold steady.
I asked him, how they build their data and what it shows about @ethereum
> How has growthepie's data evogrant days, and what has been hardest to get right? > What are the most surprising patterns in how users and value move across Ethereum? > How do you decide which new metrics and chains to prioritize while keeping the data accurate?
Full Q&A👇
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This guy knows his stuff
Our booth neighbours @growthepie_eth taking their pitch straight to Vitalik 😭
why pitch to visitors when you can pitch directly to the co-founder
cc : @web3_data @tobschcom
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CROPS -> @ethbeat_org
L2BEAT is now ETHBEAT.
5+ years of keeping L2s accountable, now extended to privacy, interop, staking and beyond. One goal: transparency on the guarantees users get on Ethereum.
Thank you to the community that got us here. The next chapter starts today! x.com/i/article/2117…
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Devcon day #2
We already had our first @growthepie_eth booth visitors, make sure to come by today if you want to chat data!
We already had our first @growthepie_eth booth visitors, make sure to come by today if you want to chat data!
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matze | growthepie 🥧 retweeted
5/ Open data helps everyone build a stronger Ethereum ecosystem.
@growthepie_eth makes Ethereum Mainnet, L2 & app data freely accessible through an open analytics platform.
Visit their booth at Devcon 8 to explore onchain data, discover ecosystem trends, & learn how to use their API.
@growthepie_eth makes Ethereum Mainnet, L2 & app data freely accessible through an open analytics platform.
Visit their booth at Devcon 8 to explore onchain data, discover ecosystem trends, & learn how to use their API.
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matze | growthepie 🥧 retweeted
For over 3 years we've been tracking everything around Ethereum, Layer 2s, apps, and more.
Now we added a whole page for Ethereum’s most important app:
ETH.
Now we added a whole page for Ethereum’s most important app:
ETH.
ETH is the asset that will secure the future.
growthepie.com/eth
▸ Productive ➡ Yield
▸ Scarce ➡ Store of Value
▸ Trusted ➡ Collateral
▸ Reliable ➡ Bearer Asset
▸ Useful ➡ Digital Oil
▸ Available ➡ Freedom Tech
Everything ETH on one page - more to come!
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👀👀
ETH is the asset that will secure the future.
growthepie.com/eth
▸ Productive ➡ Yield
▸ Scarce ➡ Store of Value
▸ Trusted ➡ Collateral
▸ Reliable ➡ Bearer Asset
▸ Useful ➡ Digital Oil
▸ Available ➡ Freedom Tech
Everything ETH on one page - more to come!
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