SharpLink, ETH Labs and Ethereum's institutional era

Transcript

that's going to at some point soon start to eat up a lot of block space. There will be lots of ether staked in many many different situations and so people laugh at the notion of ultrasound money. There is no more highowered money in the world than Ether. It will all be very clear. Ethereum strikes back. The last two weeks have seen two new high-powered organizations launch with one simple goal. Make Ethereum win. But what does that mean? How will they do it? And what do investors need to know about all of this? Hello and welcome to the Milk Road Show, the podcast that knows that disrupting Wall Street is easier said than done. I'm your host, John Gillan.

Today is Monday, July 6th, and today we are joined by Joe Luben and Joe Shalom. Joe Luben is the co-founder of Ethereum, who serves as the CEO and founder of Consensus, one of the most important companies in all of Web 3, and also the chairman of Sharplink. Joe Shalom is the CEO of Sharlink who spent over 20 years at BlackRock where he led the digital assets team for the Aladdin business. Joe Shalom and I used to sit on the same floor at BlackRock and now we are sitting on this podcast with all of you. So if you are excited for some Ethereum Alpha today, make sure you like and subscribe. Share this episode with somebody who's going to enjoy it.

Today's episode is brought to you by BitGet stocks 2.0 with real liquidity and real dividends and securitize the regulated rails for tokenization. And without further ado, welcome to the Milk Road Show, Joe Luben. Joe Shalom. How are you guys? Welcome to the show. >> Hey John, thanks for having us. >> Hey John, great to see you. >> I'm very excited for this conversation today. I think a lot of people are seeing the headlines about strategy selling Bitcoin, but after eight months with no purchases. Last week, Sharlink started buying Ethereum again. You all purchased 10,000 ETH and $10 million worth of Sharlink shares with your buyback program. Uh Joe Shalom, I wanted to start with you on this question. Why did you all decide to start deploying capital again? and what's the reason for

making this move now? >> Sure. So, Sharl Link uh for your viewers is the second largest corporate holder of ETH. We're an Ethereum digital asset treasury and our goal is to give investors directional access to the price of ETH. Think of it as beta to ETH. And then on top of that, we make that ETH incredibly productive through staking and other DeFi uh activities. Um the last uh year since we started we've actually been on a bit of a journey uh there were periods of time when ETH the price was ripping digital asset treasuries uh were on a roar and then we went through a consolidation period in

crypto but through that period we kept to our principles and our north star which is we raised capital and we deployed in ways that are accreative to investors. uh a few weeks back we raised $75 million of equity and warrants and we use that money to as you said get back to buying Ethereum, buying Ether and then doing some stock buybacks as well. So it's really really accreative to do those things especially at this price and we're excited that we're we're back in Connecticut again.

>> Joe Luben, I wanted to ask you uh about how it's been weathering a bare market from this perspective of a digital asset treasury company. there's been a lot of attention on digital asset treasury companies for the stress that they've been under during this bare market. What's that experience been like for you as somebody who is no stranger to the bare markets in crypto? >> So I I guess uh I and we have been weathering um the bare market from a couple of different perspectives. Uh one perspective is uh is the amazing progress that uh the Ethereum protocol and technology has been making. Another has been the behindthe-scenes adoption uh and excitement of uh of tradi organizations, major financial

institutions, financial market infrastructure. And yes, uh the uh the price of the sharplink equity is correlated to the price of ether uh and the price of ether has not been surging uh recently and and you know it's uh it's been correlated with Bitcoin for better or worse uh for a long long time. Um and um I actually think we're probably through it. Uh just because there uh if you see what we are seeing from the inside um you would be wildly bullish. Uh and yet yes there's a little bit uh too much ether currently uh for the amount of block space that the

Ethereum ecosystem uh has built and made available. Um but the internet is very large, the web is very large. Um, and it's going to start to uh rapidly move onto decentralized rails. Uh, we're going to see that uh uh very heavily kick into gear over the second half this year and and early next year. Uh, you'll see some announcements being made. Um and uh uh so um bottom line we we've been building for the future uh for a long time in the their ecosystem and the future um is definitely now uh and that'll start to ramify.

>> Guys, listen, we are at a very crucial point in time right now. AI stocks have ripped. They're going to keep ripping. Our analysts on the AI side are up like literally 100% or more on quite a few calls. And crypto is about to boom again. Or at least it feels that way. If you want all the insight on what we're buying, what our analysts are doing, what's on their watch list, all of that is in Milk Road Pro. So, join at the link below. >> So, less of a bare market and more of a builder market. Joe Shalom, I want to ask you a question about this. Uh, Sharplinks ticker SBET was recently added to the Russell 2000 and 3000 indices um I believe as of June 29th.

So, pretty recent news here. How significant is this milestone for you all as a public company? Do you see this as a gamecher for Sharplink or is this more of an expected milestone? How do you view this? I think it's an expected milestone. What do I mean by that? And we don't take it lightly. It means that many active investors and also passive investors in indices can now think of Sharlink as one of the constituents that they need to buy to include in their portfolios. And that's really really positive. But it's actually just another step in what we've been doing for over a year, which is we started with the thesis that institutions and retail should be owners of ETH and should be owners of a digital asset treasury. Last

summer during the summer of debts, it was very much initially a retail phenomenon, but we were equally focused on the world's largest financial institutions. We started with institutional ownership of our stock being about 6%. Today it's roughly 48% of our holders are some of the largest institutions in the world and they tend to be more buy and hold long-term focused which is really important. We're also focused on the retail investor who want that potentially parabolic uh or you know high risk highreward opportunity and you're entering at a point right now where ETH from a price to opportunity ratio is actually looking

quite favorable and Joe was talking about what we're seeing behind the scenes. You're hearing institutions almost on a daily basis make announcements that would have shocked the market a year or two ago. You know, large tokenization exercises, new stable coin entries, global stable coin in non USD, DeFi activity that is surging. All these things are largely to the benefit of the Ethereum ecosystem. And I'll say this, if you look at the scoreboard, Ethereum is largely the net winner of these activities in this momentum. Over 50% of stable coins, over 50% of real world assets and tokenization and DeFi

and Agentic are built on Ethereum. So all of this wrapping it up is really good for long-term investors. And being part of the Russell 2000 and 3000s means you have a level of support and buying that you wouldn't have as a stock that's not listed in one of these major extended market indices. So we see it as part of our journey and a recognition of what we've become in the industry which is an institutional exposure vehicle for the Ethereum opportunity. >> So you talked about institutional exposure and you mentioned DeFi. Another question I wanted to ask you all about was the Galaxy Sharplink onchain yield fund. Um, and this is a first of its kind as I understand $125 million private investment vehicle and it's

designed to deploy capital across DeFi. Uh, Joe Shalom, you know, you've been involved in DeFi uh, here now, you know, coming from Wall Street over here. Talk to me about this partnership. What makes this unique? Why are you excited about this? And just tell our audience a little bit more about what this actually is. >> Sure. Remember I said we do two things at Sharp Link. We're an ETH exposure vehicle. So you get, you know, beta linear exposure to ETH, but we also make it productive because unlike Bitcoin, it's a natively productive asset. And we're on that journey. We started with staking all our ETH, participating in liquid staking tokens. We launched a really unique groundbreaking partnership with consensus. It's Lineia 2, a layer 2 Lineia blockchain, EtherFi, to start

deploying our ETH into a liquid restaking token, but within a qualified custodian, one of the first times this has ever been done. We're stepping one step further on that efficient frontier. And two of the largest pump public companies in crypto, Sharlink and Galaxy, are launching a fund. We're each putting in capital. Galaxy will be the the general partner and manager of that fund and it'll start trying to bootstrap new onchain protocols, giving them their first capital, not from a venture perspective, but overcolateralized lending of our ETH in order to get past that cold start problem with expectation that we will get outsized yields on a

riskadjusted basis. So, we're stepping one at a time as a public company down the efficient frontier in order to generate really good risk adjusted yield for our for our investors. Um, you said, "I've been involved in DeFi for a long time. It's only been a few years." Joe, maybe you have a thought on what this means for DeFi, for institutions coming. >> Um, I I I think you you pretty much nailed it. Uh, um, the uh uh the institutions are coming. I got uh a little bit of uh positive insider info uh regarding Clarity uh at uh at the Goldman Sachs uh digital asset conference last week in London. Um a bit

of surprising positive news. Um and uh fingers crossed we'll land that uh if that doesn't land uh project crypto uh will land it um uh from the SEC and CFTC's perspective. uh but uh uh DeFi is going to uh be a major unlock uh if it gets normalized uh for traditional financial institutions and then enterprises um then uh the rest of the world will get more comfortable uh in terms of uh more normie uh retail uh users potentially we're going to have to make sure that the user interfaces are uh easy to understand um and the protocols are are getting safer and safer. I think we're going to get a a

major assist from machine intelligence because it is asymmetric uh in how um the builders uh will benefit from machine intelligence in terms of eradicating bugs uh over the the attackers uh who are sort of operating u on some of the humans and between the protocols and the cracks between protocols. So uh DeFi is is going to become uh I believe quite safe in the not too distant future and the floodgates are going to open once organizations and retail realizes that uh that they can earn significant yield in an appreciating currency rather than uh a debasing currency with with lower

yields. >> I wanted to ask a question about this. You all in the statement about this Galaxy partnership said that this was one initiative in a broader program of work. Could you elaborate on that? Does this mean a broader program of work with Galaxy with other partners or just what does that really involve here as you guys continue to expand what you're doing in the ecosystem? Yeah, the one interesting thing about running an Ethereum digital asset treasury, which is different than running a crypto fund, different than running an ETF, is we have what we think of as long-term, almost permanent capital. the idea that we accumulate ETH, we continue making it productive, but we're not under selling pressure the way an ETF is, where you essentially have to provide daily

liquidity to your investors, which means our investors in Sharplink have a bit of a competitive advantage. the idea that we can deploy our ETH on a multi-year basis, not just stake it, not just participate in DeFi, but actually make two, three-year commitments, and in return, we do something that crypto and DeFi doesn't really have, which is this idea of having actual locked value or actual duration associated with their protocols. And we can commit to that because we're in no rush to undeploy our ETH. And in return, we actually get favorable economics. Very often, we're receiving uh additional economic

incentives in the form of ETH for keeping our ETH in a sizable amount with a protocol. And what we're suggesting is there are many different ways to do this. It could be through staking, restaking, participating in DeFi, lending our ETH, but there are other use cases who need ETH. People need ETH to finance prediction markets. People need ETH to finance crypto insurance markets. So, there's almost an unlimited ability to take that ETH on a permanent basis, put it into the ecosystem and get good returns. We're just taking our time and we're doing the opposite of what crypto does. We're deploying slowly and being prepared to extract our capital quickly.

That's literally the opposite of how crypto works. And that's what we do for our investors. So, we're seeing steps along the efficient frontier, but I think there will be limits on the level of risk we're willing to take, but we're building a portfolio of ETH. I >> I want to ask Joe Luben some questions about ETH Labs and ETH institutional. But I I also want to follow up on something you just mentioned here, Joseph, which is this idea of being a fiduciary to shareholders. I've heard you say this before um about having responsibility to be a good steward of the capital and the staking rewards. talk to me a little bit about that and what that actually means in terms of how you all manage your capital at Sharplink.

>> Sure. I think that we have north stars and we don't deviate by the state of the crypto cycle. Our north star is one to accumulate ETH in a way that concentrates more and more of it per share. That's our northstar. And to do that, you could do it in many ways. We do it in a way that does that's accreative to investors. And we don't raise capital to dilute investors just for the sake of accumulation. That's what a fiduciary does. You take a long-term view. You give them a thesis. You know, for a long period of time, we didn't raise capital because it would have been dilutive for investors. And then we find these ways to raise capitals capital in a way that's accreative. And as you mentioned, some

of it will go to buy ETH, some of it will go potentially at times to buy shares because again, it's really good for investors and ETH concentration. So that's the way I would think about it. But we also have a stewardship role as being one of the most concentrated owners of ETH in a public company. Joe, Tom, Lee at Bitmine and ourselves feel like we have an obligation to the community and this might be a great pivot on why Sharlink, Joe and Tom Lee started participating in funding those really important ecosystem participants.

It's part of our fiduciary obligation. It's actually part of our mission and it's highly aligned with what our investors expect with us. >> Yeah. In simplest terms, um if you believe in the power of decentralized trust and uh that the global economy will grow increasingly decentralized. Um we're seeing real appreciation for this uh from traditional financial organizations and real necessity from the world of machine intelligence uh where uh people are starting to to really believe that certain elements of what they're building need to be decentralized otherwise uh they could come under regulatory threat potentially. Uh and so uh if you believe that uh we're moving down that path um

there are two rigorously decentralized protocols uh in the world uh one of them is smart contract platform the other one is bitcoin. If you want exposure to decentralization in Bitcoin, uh you can buy Bitcoin uh or you can buy levered Bitcoin uh in the form of MSTR or you can be you can buy damped uh Bitcoin in the form of STRC and uh and get reliable returns uh for a long time. Again, that's based on this thesis. uh Sharplink and Ethereum have an unfair advantage and that uh uh Ether is productive and so to the extent uh that we won't get out over our skis in terms of leverage and we won't uh because we

have a a steady hand at the helm it's uh I don't want to call it a slam dunker guaranteed but uh it is long-term permanent capital um and uh decentralization will cause it to grow in value and our shareholders uh uh will I think appreciate that over time. >> Well, thank you both for the thoughts on that. That was a great pivot. That is where I wanted to go with this conversation uh is towards ETHLabs and how you all are being stewards of the Ethereum network and ecosystem. June 22nd saw the announcement of ETHLabs and the the three names at the top of the list were Bitmine, Sharplink, and Joe Luben. Um, and Joe, I wanted to get your perspective on this new nonprofit, what role you see this playing, um, and what your involvement is going to be, because

this seems like a new initiative broken out from the Ethereum Foundation. I'd really like to hear your perspective on this. >> Um, so maybe it'll be best to back up a little bit. Uh, we talked about uh, price action uh, in the Ethereum ecosystem. Uh, price drive sentiment, and there's been um, some malaise at points in time over the last couple of years um, in the Ethereum ecosystem. All while that has been happening, uh the protocol uh has been doing great things. The the builders have been uh heads down uh just building. Uh but uh um the world has been changing pretty dramatically. I think uh geopolitical uh shifts um the end of a economic monetary super cycle is impacting the

world. Um and machine intelligence is uh is transforming everything. It's transforming how people understand themselves uh and how companies understand themselves and uh and so we find uh that there have been lots of pivots uh either underway or to happen and uh and the foundation actually I think uh over the last year or so if you if you look at uh Vitalik's utterances and writings I think he went into war mode to to to use a term um which you may appreciate. Um uh so uh a the Ethereum Foundation uh needed to shrink

up its budget. Uh b I believe uh this is my speculation uh that Vitalic decided that uh hey minimalism um has been helpful. uh the the thesis of of uh getting stronger by subtraction at at the uh uh Ethereum foundation level has been helpful uh in uh decentralizing or spreading um responsibility for activity across the ecosystem and it's a very broad and very deep ecosystem at this point but in an increasingly complicated multipolar world it is important I think to to have one institution and there's only one institution in the history of the world uh that I think uh has been configured

to do this uh and that's the Ethereum Foundation that the Ethereum foundation is focused on uh protecting uh the cipher punk principles. Uh so they they're doing that uh in the form of the crops mandate uh censorship resistance open source privacy security and uh Bastion took on the difficult role uh and and he's uh he's a a truly great uh executive director in the current context. He took on the difficult role of reshaping the Ethereum Foundation so it can be more focused and uh its mission could be crisper. um essentially to uh to be the north star uh the the sanctuary technology that uh that we can

all rely on to uh um to sort of stave off the possibility of living in a prison planet uh uh with surveillance everywhere and uh controlled uh by top- down uh overlords. Um so I may be exaggerating a little bit, maybe not. Um and so um what emerged from that uh is that given that that the core researchers and developers were going to focus on these components mostly but they'll focus on on other things as well. Um there were a group of uh top core developers that wanted to focus more in the near term uh on some things that would essentially foster adoption

uh for the Ethereum technology from traditional finance from machine intelligence. Uh essentially uh they wanted to concentrate on the platform holistically. They wanted to to do things that would facilitate growth uh in DeFi, in Tradfi. And they wanted to be really explicit uh about uh the tight linkage between strong ether uh and strong Ethereum strong Ethereum protocol. Uh and so uh ETH labs uh formed were instantly they instantly captured uh the excitement of all the people that they spoke with. They have secured a bunch of funding some in the

form of grants and we're trying to work out uh longer term u more sustainable uh forms of funding. Joseph and I have been uh participating a bit behind the scenes and our colleagues at at Sharplink have been doing some really great work mostly just uh sending out messages getting on calls uh of potential contributors uh to that and so uh the ETHLabs people did a lot of that work but uh but we uh helped on that front. Um ETH Labs uh needs to be credibly neutral nonprofit and uh that's what it is. we uh uh we will be delighted to provide any sort of advice.

Uh but we're not in control in any way. They they're in control and uh and uh they have also captured the um imagination and excitement of of a whole bunch of other people not necessarily from within the Ethereum Foundation. I I think they're they're looking to to try to uh leave the Ethereum Foundation primary uh and very strong uh in terms of its talent base uh but also um looks like they're a magnet to attract a bunch of 10x talent uh to the Ethereum ecosystem and to itself.

>> Gotcha. Okay. So, that's helpful to frame sort of the the context of this. I want to hear this answer from both of you on what are some of the short-term like near-term priorities that you'd like to see out of Elabs? Are there some easy wins you'd like to see them focus on and and what do you see as like the immediate next steps for this organization? I'd like to hear from both of you on this, but Joe Luben, if you want to start with that. >> I don't think that uh that Joseph uh or I um should be um suggesting what their near-term priorities are. I I think uh if you go to the website uh they they've been pretty clear. Um they've got a a significant list and and it uh it gets more and more fleshed out uh every time I see new iterations of it. uh uh but uh

um the the high level take is that uh they want to grow Ethereum and uh they want to be open and accessible uh and all the things uh in and around the Ethereum Foundation that the Ethereum Foundation isn't currently configured to address. >> Yeah. And I would I would just add you John in your intro um used words that I've been saying for a while that we're in a new era of Ethereum. I would argue it's a new complimementaryary era of Ethereum and if you look back at what the Ethereum Foundation has accomplished for over a decade at this point it has been where most of the core work lived and that era is ending. It doesn't mean

it's competitive. It's actually complimentary and it's not because the foundation has failed. It's actually because the foundation has succeeded and the network and the requirements have outgrown a single steward. So, as Joe said, the foundation's going to focus on what it does best. And that refocus created both an obligation and an opportunity for new institutions and credible stewards to step up. And we are in the business of readying Ethereum for the demand that's coming from institutions, the scale of transactions that are going to come from agentic and mach machine intelligence. So if you

took a step back, you can make an argument that the Ethereum Foundation is going to continue to be the sacred core, the protocols, principles, neutral, and conduct a lot of the important core research, the crops mandate. ETH Labs is going to be a 10x protocol accelerator. It's going to be independent, as Joe mentioned. It is going to have some of the highest density of Ethereum and technology talent. These teams and individuals came from the EF. There is uh good blood, not bad blood. And they're one of their goals is going to be to make Ethereum faster and more interoperable so it can absorb that demand. In parallel to that, you

mentioned two organizations. Ethereum institutional is the team from the EF that for the last year uh essentially under a mandate from Tomas initially has been the goto market organization the institutional front door and that too will be neutral and it has a job. Its job is to work alongside stewards like ourselves, alongside ETH Labs in parallel to the Ethereum Foundation as the gotom market organization that's credibly neutral. It's not going to be pushing L1 over any L2 or L2 over one another, but at the end of the day, they're going to provide education.

They're going to walk hundreds of institutions from the stage of evaluation to testing to production. And all these things are going to be complimentary to one another. We're just moving in a world where it's going to be multinodal and not sitting in a single foundation. And in the long run, that's extremely bullish and healthy for Ethereum. And the demand is there. We just have to supply these ingredients to help accelerate this institutional super cycle. Not one that's coming, one that's happening.

>> Yeah. after uh what I just said, I I did come into the situation having uh two personal priorities uh or or agenda items and and they were shared across Sharp Link and and across BMNR and uh and across uh the two spinouts and that was uh we needed uh both organizations uh to be nonprofit and credibly neutral. uh and we needed to unlike other blockchain ecosystems uh we needed a a decentralized group of stewards uh across the ecosystem and uh um I think of sharplink and consensus and BMR obviously the Ethereum Foundation uh and these two new organizations among some

others in the ecosystem uh as part of the uh the group of decentralized stewards. Um we needed a situation um where there wouldn't be conflicts of interest uh between uh the th those who were uh trying to educate and inform governments and financial institutions and other enterprises uh regarding the benefits of Ethereum. Um, and so we couldn't have in the most proper configuration, we we couldn't have the uh Ethereum institutional group be fully credibly neutral with no conflicts of interest inside the Ethereum Foundation anymore. And so I I think uh that was a very healthy outcome.

>> Yeah, I was going to joke before this is so weird. It's almost like you guys actually believe in decentralization. It's very strange. Um, and yeah, you know, Joe Shalom, you said, you know, complimentary Ethereum. Joe Luben, I've seen you using the term Ethereum summer on Twitter or the summer of Ethereum love and my phrase wartime Ethereum, whatever you want to call it. I think it's an exciting time and there's a lot happening. Um, just to bring our our listeners up to speed, Ethereum institutional has been referred to a couple of times. This was another organization that was launched about a week after ETHLabs. So, if you have uh not been following us last couple minutes of this conversation as this has organically come up, that's what we're talking about here. Um, and I want to ask you guys a question around this.

Etherealize is an organization that has already been doing some of this work around this institutional adoption and trying to bring ETH to institutions. And Joe Schalam, I've heard you use the term front door for institutions to to come to Ethereum. Um, and I'd like to hear about your thoughts on on how Etherealize and Ethereum institutional are going to cooperate or or what they're going to cover that's different from one another and just like some of the distinguishing things about these two organizations there. Um, as we get more and more nodes into the the governance apparatus of Ethereum here. Um Joe Schalon, would you like to speculate on that or or or Joe Luben, any thoughts on that from either of you?

>> Sure. I mean, I think Danny Ryan and Vivbec are exceptional people. They have been very focused on this idea of talking to institutions about the Ethereum opportunity. I think they're also going in the direction of building product uh and building infrastructure to help institutions. So I think it's just another positive node in the ecosystem no different than you have the enterprise Ethereum alliance who has a mission and members whose job is it is to hed educate. So this is the opposite of Solana where you have a concentrate concentrated ownership, concentrated governance, concentrated BD. This is something where Ethereum strength is its

decentralization even if at certain moments it feels like it's not organized. I think you now have more stewards who whose interests are aligned and I think these things again are complimentary of one another and not competitive. That's my take Joe. I don't know if you have a different take. Yep. Fully agreed. Um and uh I guess uh I I love the uh the front door analogy. Um I I've actually been been thinking of them of them as a a sort of neutral help desk uh for an entire ecosystem. Uh where uh uh they can answer your questions. Uh they can point you to materials. they'll produce some materials themselves and put them on the desk that you can come along and and take and uh and they know

everybody inside the EF uh and inside ETH labs and um I think they have a contact book of 500 organizations that that they've been talking to over the last year or so. Uh so uh they can route your questions um satisfy your interests uh and uh and point you to uh probably a short list of the right people to talk to across the ecosystem. >> And I will say that Tom Lee, myself, Joe will be actively involved with Ethereum institutional. Why wouldn't you try to take advantage of our I don't know what it is a thousand years of tradi macro experience? uh I'm exaggerating but

collectively we probably have a hundred years of experience and contacts and uh good stewardship and reputation. So we are going to be involved in in helping the Ethereum institutional team do their jobs and do their jobs well but again in a credibly neutral way. >> Yeah. And and what we would like to see is is to multiply that to a thousand years and and 10,000 years of experience uh um in various different aspects of of running human society. Um and so yes, we're we're the founding uh granters um of two of the two projects. uh but uh we we've been very actively trying to bring uh many others both in Tradfy and across

the ecosystem uh in to be significant uh contributors of uh of capital and opinion uh and you know assistance. >> Okay. So this conversation has been helpful I think in framing a little bit of Sharplink the the way you guys are trying to engage with Ethereum here and these two new organizations. I want to get your thoughts on some criticisms I've heard about this, which I'm I'm sure you guys have heard a lot. Um, but I've heard critics saying that this is a little bit like reshuffling some decks on the Titanic, that a lot of the membership of ETH institutional and ETH Labs used to and already were working on Ethereum in the Ethereum Foundation and that breaking this out like this doesn't really solve the the problems or or

really break the dam on some of the barriers that Ethereum has run up against. Um, and I'm curious how you respond to this and how you think these these new org structures and this new structure for the leadership and governance of Ethereum and these new organizations are going to help move the needle on some things that that maybe hadn't been able to been broke broken through before and just what are your thoughts on that? Joe, let's start with you. >> Well, there there are some premises in your question that that I just don't think are accurate. Um, I I think uh the technology has been evolving beautifully. Um it it has been intentional uh that uh we did not cut corners uh and shoot for extremely high throughput um because uh credible neutrality uh building a global

sovereign uh decentralized um digital asset settlement network uh is incredibly important. Uh and so we're in a position now in the Ethereum ecosystem uh where we can very significantly uh grow transaction throughput um year after year. We're on our our 3x roughly annual track. uh that's going really well and that's going to be I think accelerated by machine intelligence and our friends at ETH labs um uh joining in from their own perspective uh with the the EF uh who is also uh very interested in scaling the technology. So anybody uh who thinks that uh the Ethereum is the Titanic um rather than uh the dominant

blockchain ecosystem on the planet um winning by virtually all measures um has an agenda. >> Yeah. And look, Joe mentioned there's been some mallays. Um Joe mentioned that we have s had some communication and narrative issues. That that's true. I think that's now a thing of the past. But imagine despite having that um those challenges, if you look at the scoreboard, we're probably in the second inning of an of an institutional super cycle. And look at the four things that matter most. Um stable coins, the first proof point of tokenization, highly successful, over 50% happening on Ethereum. the next like Solana I think

has less than onetenth of that uh TVL and transaction volume um tokenized assets largely defined on Ethereum when I was at Black Rockck we launched on Ethereum when Robin Hood is launching they're launching on Ethereum JP Morgan's tokenizing assets and deposits on Ethereum governments in Europe and around the world they're choosing Ethereum so this idea of a government sovereign capital markets use case of tokenization which I would say is in the bottom of the first inning and about to go parabolic. It's happening largely on Ethereum and by a mile DeFi was built on Ethereum. Look at the likes of A and Morpho and high quality DeFi borrowing,

lending, collateral pools. Ethereum uh defined it and uh has the vast market share and in the machine uh autonomous agentic economy this machine intelligence economy X42 the microp payment standard that Coinbase built and open-sourced and ERC8004 are going to be the two mechanisms in which this tidal wave of transaction volume is going to come. I believe it's largely going to happen in the Ethereum ecosystem. And I think it'll be really, really good at sucking up block space.

And so by each of these measures, tokenized assets, stable coins, DeFi, and the coming agentic economy, Ethereum is in pole position. And like there's a big gap between them and anyone else despite some of the malaise narrative. Now we're going on offense and we're going to have an Ethereum summer. uh we're going to we're going to do a better job communicating, engaging institutions to make this easy decision of choosing Ethereum even easier. So despite all the negativity, it's winning by a mile.

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>> Everyone's tokenizing stocks these days, but almost nobody's doing it right. Thin liquidity, prices that drift from the real thing, dividends that just vanish, bit stocks 2.0 is different. Real NASDAQ and New York Stock Exchange depth through licensed brokers. Prices mapped one to one. Dividends paid to your account in real time. Plus, you get the lowest fees in the market at just 0.04%. And you can trade them like any other crypto as margin in earn in grid trading. Tokenized stocks finally done right. Head to milkroad.com/bitgget to get started. Well, wartime Ethereum forever. Uh Joe, I want to kind of build on this question here a little bit. I've heard a comment from you that I thought was really insightful. You said that Ethereum's true competitor is not a Salana or a Canton or another one of

these um blockchain ecosystems, but it's really the legacy systems that institutions have billions of dollars of sunk cost on and years of inertia built up on. How do you view going about, you know, breaking this this stronghold and sort of getting these institutions to begin to make the move to Ethereum as opposed to sticking to these legacy systems they've got so much inertia on? >> I made that comment on a podcast on Thursday, but Joe, you take the answer because you've been >> Sorry, Joseph. I was I was thinking Joseph. I said Joe, this is going to happen a lot. I knew this. >> I was about to say that uh I don't remember making that comment. I wouldn't frame it that way. The way I would frame it is that uh one of Ethereum's biggest near-term opportunities um is the legacy financial system. Uh given the

mindblowing redundancy in place in not not just across let's say banks but within a single bank. If you you think about uh how many banks an organization like JP Morgan or or City or Bony have have rolled up over the years, uh I'm sure they tried to to streamline things, but uh they do have parallel infrastructure inside those organizations. Um I I've heard it uh said that uh um banks are reconciliation companies um that al also offer financial services to to people and organizations. Uh and so um you don't really need to uh reconcile uh a single

source of truth. You just need to uh to make use of it in much more efficient ways. And so uh there are lots of crypto people inside of financial institutions. Uh uh they were the the weird kids and then um became less marginalized. Uh Joseph uh uh led that pretty early uh inside Black Rockck. Um and now um they have a lot of influence inside u major organizations and some of them have convinced uh their CEOs uh very loud prominent CEOs to to also lead the charge.

>> Yep. And John what's interesting is I think if you took all these large financial institutions and you generalized about them they're pretty predictable. They don't like change when they're moving from one rail to another. They don't want to go from one vendor lock in in one proprietary database or a million to another. They care deeply about three or four things. And this is a generalization, but I think it applies to every one of these institutions that make them is making a decision. They want to go where that their new form of assets are going to be most secure with uptime, predictability, where the rules of the road are not going to change.

Especially when you go from T+1 settlement to same day where you can't pick up the phone and call a counterparty and say, "Hey, we've been trading together for 40 years. Do me a favor and reverse that trade." In blockchain space, it's immutable, which means you need that sense of security and trust. And then they're also very very clear that when they trade, they want to be where they can get the best execution for their clients, which is where there's a depth of liquidity. And Ethereum is leading that by a mile uh if not more. And so I think these institutions are consistent. They like security, they like trust, they like predictability, they like decentralization because it represents

trust and security. Oh, and by the way, if this is the chain with the most assets and the depth of liquidity, um that's where they want to be. Now there is some fragmentation and at some point um to me one of the most exciting things happening in crypto which will actually be very beneficial for both retail and crypto and institutions is this idea of synchronous composability that even though you have mainet a number of L2s even Solana the ability to compose a transaction with multiple legs where you do not need to worry about what chain they're on or whether one leg fails and the other one doesn't. These are really exciting things. So, institutions care

about not only what I described, but the usability and Ethereum is going to have incredible capabilities around um composability in a more synchronous way. And I think that is going to be a huge lift for for how actual institutions trade and for the ability of them to have a better user experience than what they have today in crypto. So, I'm beyond excited. You don't have to convince institutions. You just have to give them a front door and you give them a path to the scale that they need. >> Yeah. And so we've been talking about uh Trady quite a bit on this call. Um I remain a uh a decentralization maximalist and uh and a pragmatist. I

think a lot of people in the Ethereum ecosystem even from the start felt that uh unless we made proper decentralization available to as much of the global economy as possible uh we won't really have succeeded. Uh and so what Joseph was speaking about uh synchronous composability uh and near synchronous composability across private permission networks and layer 2 networks and layer 1 is essentially the holy grail uh that uh uh comes close to competing completing uh the Ethereum rollup ccentric roadmap vision uh where we can have scalability and modularity um where um things can be in their right place uh and still they can benefit from

the full security guarantees and the rigorous decentralization uh of the Ethereum protocol even if they're sitting on a private permission network and and so you can uh coming to a to a wallet or a browser near you 6 n 12 months from now. >> Joe, let's build on that idea. You've spoken about this a little bit, but you said you're a decentralization maximalist. Vitalik recently said he wants the Ethereum Foundation to just be a node among nodes in the governance of Ethereum. Now that we have these new organizations, do you think that we have all the nodes that we need? Are there new nodes that you'd like to see built out or how do you just see the evolution of Ethereum's governance uh going forward from here >> evolving? I I guess I'm I'm not uh of the belief that I or anybody can cop can

top down design it or or control it. Uh and so um all these uh uh complexities keep popping up in human society and uh humans are really good at uh at solving them. Uh and uh we're going to get so much more capable uh as uh as machine intelligence supercharges all of us. >> Joe Joseph um Joseph Shalom. I see when I worked at Black Rockck, Joe Shalom was was just what I called him. It was always >> two words together.

Yeah, John, we did this to confuse you. We did this to confuse you. This was a grand scheme going back 60 years ago. >> Well, it's it's worked out beautifully. Uh Joe, shalom. You've spoken a lot about the coopetition between Bitmine and Sharlink. I'd love to hear about the relationship with Bitmine here. You touched on this a little bit, but at the the top of the letterheads for ETH Ethereum Institutional and ETHLabs, um Bitmine's name is right next to Sharp Links. What's that relationship like? And then I'd like to hear from you also about this co-opetition, right? Like these are not all these these foundations, ETHLabs, ETH institutional, Ethereum Foundation. They're not all the same entity there. You know, theoretically could be some tension between them in terms of strategic vision or activity. What what would you

like to see there? What does a healthy coopetition look like in this ecosystem? >> Well, I think in the Ethereum digital asset treasury ecosystem, I use that word going back to I think late July. the idea that there were six or seven Ethereum digital asset treasuries who had land launched last summer and fall who were competing for capital. They were competing for talent. They were competing to accumulate ETH. But at the same time, they had a very common mission. The idea that they all collectively believed with conviction that there's a massive Ethereum opportunity out there, a multi-deade opportunity. And we were all set up with the idea of giving people access to that opportunity. I think as you've seen the

ecosystem evolve, there are two or three of us left who've been able to get scale, build trust with investors. Several DATs have fallen away, have essentially um changed their strategy to do other things. Our relationship with Bitmine is actually very positive and very strong on both the institutional level. you know, we were able to collaborate to, you know, along with Joe Luben fund these two organizations, announce it, agree on the governance frameworks. They're going to be not for profofit. They're going to be controlled and independent. They're going to be neutral, but at the same time to realize that we actually have more in common than we have apart. Uh we speak on a

relatively frequent basis. We appear on panels together. And I would say it's as positive as it can be among people who have the same mission, who are competing for the same investors. So I think it's at this point become more cooperation than competition. But at the same time, we each have our shareholders and we have different swim lanes. We have chosen to be at Sharplink the more institutionally focused at and we have a super clean balance sheet and um we're doing the right things for our shareholders and despite the downturn and consolidation in price we haven't done anything to deviate from our core principles but yes it's co-opetition but I think the cooperation is more positive

than people could even imagine. Joe I'd love your take because many times it's three of us on these calls. Yeah, if you look at all the things that uh that Sharpling cares about and that that Bitmine cares about, I would say 90% of them are aligned. Um you know, it's uh it's all about uh growing the Ethereum ecosystem uh growing um the value of the Ether token. Um and that ramifies uh very positively for our shareholders and theirs. >> Joe Luben, I wanted to ask you a question. And as you said, this conversation has been very focused on institutions, but Ethereum is still very much a grassroots project. Um, and we recently crossed a milestone of 1 million developer contributions to the

code in the Ethereum ecosystem. And I wanted to get your your thought about this. You you tweeted about this, I believe, but what's the significance of this milestone to you personally as one of Ethereum's earliest developers? And what does this mean for Ethereum overall? >> Well, it it's a tremendous milestone. our our friends at Electric Capital um sourced that uh fact and pointed it out uh and uh so we've been leaning into talking about that a little bit uh a few years ago uh at the Osaka DevCon. One of the things I said in in my keynote was that uh we should make it a goal um to have a million Ethereum developers. Um uh we looked at the world at that point and there were 30 something million

developers um in different languages and in different disciplines uh around the world. Um and uh and so we thought that was a nice round number um to and to put the call out. We're already uh the dominant uh developer ecosystem in the in the blockchain space and uh years later um we continue to be and uh um and I I think uh I think we will remain and grow our dominance. >> Yeah. Okay. Great. That's very helpful. I I want to ask both of you this question because I think you both will have different answers to this and I'd really be curious to hear this. The Glamsterdam upgrade is coming to Ethereum sometime in Q3 of 2026. I don't believe that there's a firm date set

yet. Um, and we don't have to go into a deep dive on Glam right now, but I'd really like to hear your thoughts about what you're most excited about from this upgrade. What is this going to unlock? This, you know, the biggest upgrade since the merge. A lot of people are calling us that. Um, decentralizes block building. It introduces parallel processing. Um, I'm just curious, what are you most excited about from the Glamston upgrade? What does that unlock for Ethereum and for Sharplink? Uh, Joe Luben, you want to start with this one? >> Uh, sure. Uh so first uh we continue on our drum beat uh to grow scalability uh so so moving uh again another 3x down the road on an annual basis uh is huge um but uh I think the parallelism um you know the the two big headliner EIP's uh

uh block linked access list does enable a lot of efficiencies in the protocol and it will enable very significant uh additional scalability. And so you you hinted at it when you know um where all the potential uh conflicts are in terms of uh accessing uh data that could be overwritten in a single block. Um uh what you can do is uh is make sure that uh even if you start to to do a lot of things in parallel uh they they can be architected and sequenced so that uh there are no collisions and you don't have to to redo that work. Uh so it's uh it uh you know

we've been solving a lot of other problems um in the protocol um and there have been lots of calls to paralyze things. We've actually done a little parallelization at consensus in in our Basu uh execution client, but uh it's time we uh uh we can now get uh uh increasingly parallelized and uh and you know there there's so many different dimensions that we're going to be able to to scale the protocol on. Um and uh uh enshrine proposer builder separation is really great uh for taking a bunch of things that uh uh that were offchain and and uh not in the protocol and uh required trust assumptions and and

bringing them under the tent and into the protocol and and doing things right. uh and so uh whenever and it's going to happen uh again and again because Ethereum needs to keep evolving uh to stay relevant and and to uh to to get more and more capable and scalable. Um, so whenever we identify uh things that emerge uh because uh an itch needs to be scratched or a problem needs to be solved, uh we're going to go ahead and do that. Um solve the problem. Uh and then uh if it if that introduces things that that are concerning at all, uh then we can take a careful look at that and and bring it into uh decentralized uh configuration inside the protocol.

>> Josh Shalom, anything you want to add to that? I I just think um so Joe was referring to EPBS or enshrined proposer builder separation. The fact that it moves coordination from the protocol and directly into the protocol instead of relying on these third party relays, it actually really helps avoid validator concentration and centralization. It also allows block propagation uh periods to be longer. And if you contrast Ethereum with some of the other chains, uh Ethereum has over a million validators while and is becoming essentially more diversified and less

reliant uh on them as a centralized player. That's very different than what you see on Salana. It's certainly very different than what you see on Canton. So this is really really important. Ethereum is already leading in this way and uh you don't want to be running on a blockchain that has validator centralization and this is going to be really really helpful to avoid that when you already have the highest level of diversification of validators out there. So when you speak to institutions, I need to do a better job translating this into English because what you're basically saying is don't go from vendor lock in to validator lock in or

validator centralization. This is the economic security engine and the benefit that that Ethereum brings. The Ethereum Foundation wrote an amazing piece last week. It was 70 plus pages written in almost plain English for institutions and governments. And when they call out, it would take a central single party over $50 billion of ETH ownership to threaten the Ethereum security model. No other blockchain is as close. So, Glamsterdam's going to be huge and it's going to be reinforcing the advantages that Ethereum already has over its competitors and certainly over the current financial rails.

>> Really helpful context on that. Joe Schalam, I read that piece over the Fourth of July weekend. I thought that was fantastic. So, if anybody hasn't read that piece, it's 71 pages of just riveting information about why Ethereum is going to win. Um, I want to end this with a conversation around ETH the asset because I think that this, you know, both of you have alluded to this. I think it's well known. The frustration and price action has been a big source of just people rage quitting or or just in general losing patience and and getting frustrated. Vitalic said something recently I thought was really uh insightful in reference to Ethereum's crops, the the values, the principles of Ethereum. He said the principles don't matter until people benefit from them.

And I'd love to hear both of you comment on how these organizations and these efforts that are we're seeing in the ETH ecosystem are going to make all these properties that Ethereum has beneficial to people and then tie that back to how this is going to drive value to ETH the asset. I know you're both tired of this question, but I think it's the most important one right now and I'd love to hear your thoughts on this. Uh Joe Luben, would you like to begin with this one? >> Sure. The principles do matter. um they matter at all times uh because you don't know exactly when um you're going to need the system to behave in a way in a principled way essentially. And uh and so I I understand what Vitalik was trying to say there. He he's he was trying to say that uh you all just watch

uh we're we're going to need this stuff very soon. Um and uh uh and so in terms of price action, if you think about the fact that it was 20 cents uh a little over 10 years ago, um and if you think about the fact that it is um a profound transformation in the way trust operates on the planet. Uh so we're going from living in a society um that operated top- down command and control uh for millennia. Uh and uh we are uh proposing to replace that with a a bottomup decentralized trust infrastructure. Uh and we're proposing to do that at scale

uh where uh not just all the web but all of the traditional economy can benefit from this technology. we uh we've had to overbuild. Um we and and it's not that we have nearly enough block space um because we're going to need so much more, but we do now have elastic mechanisms that will enable us to to add more and more block space uh over time. And so uh the Ethereum developers, core developers essentially seated pricing power uh to the roll-up road map and to the roll-ups and uh that was good. It enabled the technology to establish itself in some different forms. Um the ZK form is incredibly powerful and uh

that's going to be the way forward uh for both uh layer 2s uh for private permission networks that that can now actually participate along with layer 2s and layer 1 uh in uh orchestrated transaction sets. Um and it's going to it's going to essentially saturate uh um the layer 1 protocol. Uh and so uh when we get to the point uh where um there are a lot more transactions and they're coming uh from the trady direction and they're coming from the machine intelligence direction um and the the sort of native organic um DGEN direction uh will continue to build and we'll

continue to innovate and and so we need we need recognition from outside of our ecosystem and util utilization from outside of our ecosystem uh in order to make our system uh much more valuable and relevant. Uh and that's going to at some point soon start to eat up a lot of block space. Um there will be lots of ether staked in many many different situations. And so people uh laugh at the notion of ultrasound money. Um there there is no no more highpowered um money in the world uh than than ether.

Well, it will all be very clear at some point uh within the next two years maybe maybe a little longer. >> Joe Shalom, would you like to build on that? Ether is the the best money in the world. Anything to add to that? >> The highest powered money. >> Well, I I I I agree with Joe. That's the economic thesis that there's no Ethereum without Ether. There's no Ether without Ethereum. And as transaction volumes come, there'll be more demand for Ether. And it will be that trust commodity that institutions need to have. And even if you look at you know Robin Hood selecting arbitum as their L2 to power their crypto uh platform they derive security from mainet Ethereum and they

transaction gas is paid with ETH. So these things are really good for the ecosystem. I think the rollup seeded intentionally a lot of the economic value to drive more transactions and throughput. And the good news is the market share is there like any other chain would trade hands with Ethereum in an instant to get that level of market share. Uh and if you believe in these three things that are three or four things that are coming, more stable coin activity, the money layer, more tokenized assets going from tens of billions to tens of trillions, the asset exposure layer, and DeFi being the layer at which transactions happen for both

humans, institutions, and autonomous machine intelligence and agentic agents. The demand is going to be there. the level of transaction volumes that we anticipate again I don't know if it's next quarter or a year from now are going to be much more significant and that's going to drive demand for ether uh which today um is uh at a depressed price but it's quite ironic having the short-term consolidation in price when the long-term outlook for demand is so high >> last week I did an interview with Roger Bas who is the head of digital assets for Franklin Templeton and he's been at that firm for nearly 40 years and he said something that resonated a lot with

what you just said Joe. He said that all of our business is based on trust. And I I said in my debate with David Hoffman about, you know, why he sold his Ethereum that all of finances downstream of trust and faith. And I think that this is one of the reasons why, like Vitalik says, crops are so important. People will benefit from them. That brings capital, pristine assets, users, and it creates an economy. So I think we'll see how that continues to play out. But that's I think how we got here and how we go forward. Um, I I want to ask about how you all are thinking about measuring success because, you know, Joe Shalom, I've heard you make reference to the scoreboard. Joe Luben, I think that you have other ways of measuring success for this network and for this asset. Is it the price of the Ether token? Is it

the adoption, the developers? Is it the price of ESBET? Is it all of these things? How do you go about measuring success here? What does that look like in your mind? Um, we started with Joe Luben a few times. Joe Shalom, let's start with you on this one. >> Sure. So you can't disconnect Sharplink from the Ethereum ecosystem and the Ethereum opportunity. So for me, it's three things in the Ethereum ecosystem. It's growing the pie. It's not just having 50% of each of these food groups and maintaining that market share. It's maintaining or growing that market share in a pie that's about to get much much larger. And if you take a step back and you look at the crypto ecosystem, probably has about a $2.5 trillion

market cap, that is not the TAM. The target market is measured in tens if not hundreds of trillions just for capital markets. So it's Ethereum growing its market share in a rapidly growing uh market. Again, I use the analogy of Jeff Bezos. He wasn't here trying to dominate book selling. He was building a new market structure for all of commerce and people who thought he was losing money selling books missed the big picture and missed out on a thousandx. So from an Ethereum perspective, it's that I also think that builders and talent are critical to the long-term success of a business of an ecosystem especially for

the trust that we expect and one of the reasons why ETH Labs and Ethereum institutional were set up were on the one hand not to lose the density of talent that Ethereum has, but they'll end up being magnets. So the second measure is that these institutions are actually wildly successful in attracting the best talent, paying for performance and then shipping out new capabilities and then implementing those capabilities. And the final thing from a sharling perspective, we have a north star which is not accumulation of ETH at all cost. We own about a billion half dollars, a little over a billion and a half dollars of ETH today, the second largest public holder. Our goal is to

put more and more ETH in every share of Sharlink and we do that through raising capital accreatively and we do that by making our ETH productive and putting it back in the treasury. In the future we'll build operating businesses that will be ETH aligned, generate revenue or ETH that we can use to accumulate as well. So I think we need to avoid the short- termism. I think we need to avoid fudding other people and protocols and network. The amount of prosperity and economic activity that this ecosystem is going to help support is going to blow people away. So, you got to be positive even though sometimes in the short run it looks like we're in a very uh

consolidated cycle. >> Joe Luben, how do you measure success? The internet uh was in invented decades ago as a a military and academic technology. Uh Tim Bernersley in 1989 introduced the web technologies to the world. Uh that they evolved over the next decade or so. There were these companies called interactive companies or internet companies uh Razerfish etc that started building websites uh for traditional companies. uh and they uh uh they brought uh some traditional companies uh onto the web, e-commerce, mobile, social, etc. uh evolved things and uh um and uh essentially there were internet companies and now every company

is an internet company and so digital asset treasury companies are figuring out how to how to hold uh digital assets on balance sheet and do interesting and powerful things uh with digital assets uh uh from uh the perspective of their treasury. Um but um increasingly um everybody is going to uh become a digital asset company or or every company will. And so uh when it becomes clear uh that uh all roads uh flow to and through uh the Ethereum network and Ethereum technology then then I think we will have succeeded.

>> Joe Luben, CEO of Consensus. Joe Shalom, CEO of Sharlink. Thank you both so much for being on the Milkro show. I'm going to have to end us here because otherwise I'm going to get fired for going way over time, but I would love to welcome both of you back anytime to continue this conversation as this starts to play out and we see some of the impact that these organizations are making. Um, but in the meantime, where can we send people to find more of you and your work online? Joe Luben, where can we send people to find you? >> Twitter, Ethereum, and Joseph >> and Joe Shalom. How about you? >> Uh, sharplink.com and Twitter, Joe Shalom. >> Thank you both so much for being on the Milkro show. I look forward to continuing the conversation next time.

Cool. Thanks, John. >> Thanks, John. >> And thank you all for joining us. I hope you all learned something today. We covered a lot of ground, so I certainly hope you did. Uh, but until next time, stay safe, stay educated, stay bullish, and I will see you all in the next episode of the Milkro Show. Thanks for being here, everyone. Bye. Want insights on what's moving crypto markets and how we're trading each event? Subscribe to our channel, join the Milkro Daily and Pro Newsletters, and start investing like the top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.