The Buyback Era Comes To ETH (What's Coming)

Transcript

Is ETH issuance perfect right now? You would make no changes, or if you were to have a perfect world and make changes and it were to go through, what would you do to ETH issuance and the monetary policy right now? >> Yeah, Ken, you you want to start? >> Yeah, I think look, from my perspective, is Ethereum perfect? Absolutely not. Is issuance perfect? Again, not. But, there's so many other things you could focus your attention on and make a more meaningful impact. Like, at the end of the day, everyone wants to grow Ethereum adoption at an institutional and also at a retailer personal level. So, for me, I just think more effort could be spent on making Ethereum more accessible, building applications on Ethereum that grows

adoption. So, again, for me, I just think people are spending their time and effort on a topic that's not exactly the most high on the priority list. And there's time better spent elsewhere. >> And Joseph, anything from your perspective as maybe a consumer of ETH yield rather than a supplier, what what else would you be looking for? >> To be honest with you, at this moment, when Ethereum feels like it's going on offense, look at the scoreboard and compare it across stablecoin adoption, tokenized real-world assets, and >> [clears throat] >> and DeFi, I would be spending my time and money, and I'm doing both, to drive the institutional adoption. We're at a

moment that matters. The world's largest institutions are going from tokenizing de novo or brand new products. When I was at BlackRock, we took a couple of years to plan and get our BUIDL token to be the largest tokenized fund in the world, but it took a couple of years. A year and a half after I left BlackRock, they're tokenizing existing funds, money market funds, with $8 billion of existing assets. That is like 30% of all tokenization happening in one shot. And so, I'd be very, very focused on supporting those use cases. And then, I'd also be very focused on building a differentiated offering in Ethereum for Agoric. I know it sounds

like a cliché, but if you're dominating stablecoins, which is the money layer, you're dominating in tokenized real-world assets, which is the asset exposure layer. It's not a new asset class. And DeFi and on-chain finance is where a lot of the execution is happening. The Agoric layer is just the automation layer that's going to bring billions of new users to Ethereum. They may be agents, but they're users and they're going to transact and they want decentralized rails. So, I'd be focusing on that rather than messing with the protocol. I think that is the most important way to drive Ethereum adoption. And then, when you get that level of transactions, the burn will pick up and you'll start seeing Ether be

what it is, which is a really important trust commodity that you're going to need you're going to need to do on-chain finance. So, I'm I'm less focused on making technical changes to the protocol. I'm actually hoping we can put it in the hands of every person in the world. Yep. >> Um Keen, something specifically with regards to Lido, you know, Joe mentioned uh the exposure with the $20 million of ETH into the protocol as well as um you know, there is Lido rewards that you know, that you earn through staking with Lido. There's different programs.

Obviously, enterprise and commercial deals are now a part of kind of Lido's institutional offering here, right? Not not needing to get into the details here, but a kind of a separate uh tangent that I'm curious how you're thinking about is uh you know, we coin this term revenue meta. It's kind of a silly term, but it's what's happening where you've got these protocols that are earning a lot of actual revenue, right? Some from some product market fit, whether it's perps, whether it's trading, whether it's yield, whether it's staking, whether it's stablecoins. And they're kind of restructuring their token models around essentially treating token holders as first class citizens.

And I want to say Joe that I think that's where this EIP is coming from is kind of from this kind of potentially short-lived pendulum swing in a bear market of hey, we want to you know, try to make these crypto assets more more attractive to investors by essentially evening out their emissions versus their kind of inflows trying to kind of turn that into a positive. A lot of this you know, stem from the administration that has previously been elected the Trump administration hyperliquid kind of came out did this you know, huge buyback program and so you've got protocols like Lido been very very profitable profitable for a while but you have these emissions you have expenses you have all these things Keen that investors are now coming to you and basically saying look we don't even want

to really get involved unless we're looking at something that we're investing into a business where the equity is the token and the token holders are being treated as first class citizens meaning buybacks meaning transparency meaning openness profit sharing etc. And so I'm just curious Keen what your current viewpoint is from the Lido perspective the Lido token perspective and just this this kind of rhetoric and current era of the token market in digital assets outside of Bitcoin and ethereum maybe you put in something like Zcash in there or some other other kind of like monetary assets these on-chain businesses the way that the tokens are being you know, thought of now how do you think about this from a Lido perspective what changes are you making what changes

are you not making how are you guys you know, kind of going about this era? >> All right. Um Yeah, it's it's quite a broad and I suppose there's a lot of different nuances to this and I think like anything in life there's levels. I definitely view Lido as tier one battle tested. One thing that Lido is tremendously good at is getting feedback and listening to feedback. So by that I mean the Lido research forum anyone can go post, get feedback, and guidance. And I can say again with absolute certainty, the contributors in Lido, they do look at that and they take it seriously. And I think that's been one point of criticism that's been raised a number of times against Lido where all the revenue is being generated from staking and in the stETH, and it's not being passed

over to LDO token holders. So, one of the big actions that taken place over the past year and that's really kind of ramped up over the past couple of months is LDO buyback program. So, this is I suppose probably the first prong where we're trying to again increase the token price, give I suppose token holders skin in the game from the revenue that's being generated in Lido. But again, this is the first prong and there's definitely a huge amount of work taking place behind the scene scenes to okay, how can we do more for token holders, how can we implement their feedback? Um so, what I would say is kind of watch this space.

>> Yeah. But you generally kind of see this shift as one that is healthy and signs of a maturing space. Is it overextended? Just kind of more broadly speaking, I'm curious what you guys think about this kind of uh this, you know, more revenue focused, product market fit focused that we're entering as a space. >> I personally I think it's fantastic. Like, it's a sign of maturity. Like, I've been in crypto for around 10 years and I would say there was never really talk for P&L, how do you manage risk? Now suddenly institutions are entering the room, people are looking at it from a different lens. Whereas I think before it was a little bit of throw at the dartboard, see what sticks.

Now people are asking real serious questions. And again, I think that's a sign of maturity for Ethereum. Like, if you look at it even just from a business perspective, like um you have the work of Joseph Schmo is doing again. I I would think Joseph is a de facto head of BD for Ethereum to a degree. All the work that doctors are doing, you have Ethereum institutional, you have the Enterprise Ethereum Alliance. These are again bodies that are are serious institutional and just structure around Ethereum. So, I think this is all positive developments and it's a really good sign to see.