00:00 Laura Shin
And you you think that even for Ethereum, it’s there like the utility is is minimal.
00:08 Speaker A
Well, yeah, I mean, let’s do the math for a second, right? If I’m on Defy Lma right now and I look at 30-day revenue, Ethereum’s not even in the top 50. Right? It’s barely in the top 50. It did $6 million of revenue in the last 30 days. So let’s, you know, let’s let’s give them the benefit of the doubt and say that this was a, you know, pretty bad month and let’s double that to 10 million, right? Now you’re talking $120 million per year of revenue for Ethereum. Let’s let’s slap a very generous, you know, 20 times multiple on that.
00:59 Speaker A
You know, you’re only looking at a couple of billion dollars of financial value there.
01:03 Laura Shin
And and you wouldn’t count uh like securing the layer twos. You wouldn’t you wouldn’t sort of like have some sort of inclusive way of measuring even if it’s some fraction of that activity, you wouldn’t include that.
01:17 Speaker A
Well, even if you did, I mean, how much is that really worth? Right? I mean, there’s a billion chains. Um there there’s virtually no cost to move in between chains. You know, it’s as an economist, you would call that perfect substitutes. Um, I don’t know. I I wouldn’t put a huge value on it. but then on the utility value question, that’s what you really asked, you know, it’s estimated that there’s 200 million Ethereum wallets out there and it’s estimated that on average people own about .1 ETH. So that means 20 million ETH is basically just sitting idle for purposes of gas or other things.
01:50 Speaker A
So you take 20 million ETH times, you know, the current $2,000 per ETH, you’re talking 40 billion. So, you know, ETH is worth what 200 billion and I can only come up with 45 billion of that that’s actually quantifiable. So the other two, it’s a $246 billion asset and I can come up with maybe 50 billion worth of tangible reasons why it’s worth something. That’s that leaves 200 billion left over of just social value or hopium.
02:16 Laura Shin
And and but you so is Ethereum an outlier amongst crypto tokens in that respect or is is it um just one of many crypto tokens where the analysis would be pretty much the same?
02:29 Speaker A
No, Solana is basically the same thing, right? Solana, uh, Solana is not even in the top 100 on Defy Lama in terms of revenue, right? And they’ll argue, you know, anybody who’s a Solana bull will argue, we need to win as the biggest network before we, you know, worry about revenue. Okay, well the last 30 days the Solana Network has generated 1.7 million of fees. right? So same thing, you know, even if you’re generous and called that 5 million monthly and um, you know, now you’re looking at what, 60 million in annual fees.
03:00 Speaker A
$60 million in annual fees. Slap whatever multiple you want on that. Uh it’s not worth more than, you know, five or $10 billion. And Solana has a what, $50 billion market cap. And then if you look at the utility function, same same problem, right? There’s only 100 million Solana wallets, a little bit less than about half of Ethereum. On average, people own about 0.02 SOL. So you’re talking 2 million SOL, um, you know, at at most, um, that is actually owned for the purposes of gas and and actually using it.
03:32 Speaker A
Um, you know, again, at $100 a So, you’re talking $200 million worth. It just doesn’t get you anywhere close to the $50 billion dollars that people think this network is worth.
03:42 Laura Shin
You just heard a piece of Unchained. I’m host Laura Shin, and the full conversation is in the description below. We go live every Monday and Thursday. Subscribe so you never miss it.