The DeFi Report | Adviser to Start-Ups & Asset Managers | ex. MITIMCo, Boston Properties
Quick reminder that Ethereum hit $10 billion in revenue faster than any other major software company besides Google. But that's probably the least interesting thing about the network. 10 reasons why: 1. Ethereum's computing infrastructure is run by a distributed and global network of service providers. This is where the $10b was paid — not a centralized entity. 2. Ethereum's addressable market is massive — in my opinion, it could one day serve as the global settlement layer for all of finance. 3. From first principles, Ethereum is essentially laying down a new data infrastructure for the internet. This new data structure functions as a global accounting ledger that anyone can access, audit, provide services for, or build a business on top of. 4. Ethereum currently controls a roughly 80% market share amongst competing smart contract platforms. 5. Ethereum has the strongest network effects in crypto. Its network value grows as the number of connected users increases (Metcalf's Law). This is driven by a foundation of developers, developer tooling, programming languages, the EVM standard, token standards, wallets, applications, scaling infrastructure, and venture capital investment. 6. Ethereum is the only crypto network that returns a positive real yield to holders of its native token, ETH. The yield earned by holders (who validate transactions on the network) is earned in the form of user fees. 7. Ethereum has over 111 million non-zero wallet addresses. It has over 800 thousand validators worldwide. And it has the largest crypto exchange in America (110 million verified users) building scaling solutions on it. 8. Ethereum (and public blockchains broadly) are introducing the concept of digital property rights to the internet. An abstract concept that has profound implications in the long-term. 9. Ernst & Young recently launched a privacy-focused layer 2 network within the public Ethereum network — designed to onboard enterprises. Per Paul Brody, "Ethereum is to business ecosystems as ERP is to enterprises" The team forecasts over 4 billion transactions per day for automotive supply chain use cases alone. 10. Ethereum is scaling and developing in a very similar manner as the internet did. YouTube, SaaS, Zoom, E-Commerce, and Social Media were not possible before broadband. Emerging layer 2 solutions are just gaining adoption which should enable a host of new applications previously unthinkable. ---- The Q4 update of *The Ethereum Investment Framework* will be published next Wednesday. We cover these concepts as well as every important KPI/metric going back to network inception using data from Token Terminal — the leading onchain data provider for institutions. If you'd like to receive a copy when it's published, see the first comment. h/t Caleb & Brown
"Ethereum has over 111 million non-zero wallet addresses" - is a non-zero wallet address one that contains ETH, or does an ERC20 or NFT make it count as a non-zero wallet? (If it's just ETH, then the fact that you can't clear dust out of Ethereum addresses artificially inflates that value).
How does Ethereum make revenue?
It's not REVENUE, it's transactions in the network. The revenue is only to miners (and in a very very very small number). This whole argument is a fallacy.
Nick Bishop CFA
8mo
It's a great chart. Similar to Sherwin Jiang however I question the apples v apples nature of this chart. the eth network is more like a co-operative or a syndicate, it's not a company. this chart really compares an ecosystem, with individual legal personalities. to be really apples v apples, we would need all the associated partner revenue earned by stores on Amazon etc
Nick Culpin
8mo
feels strange to compare an open source network to a company like this.
Thanks for sharing. What are your thoughts on valuation, either relative (to SOL) or absolute? What’s the downside case? Thanks.
Kim Klemballa
8mo
Great post and chart!
This post provides evidence and credence for the SEC's claim that DLT-based assets are securities. It lays out the revenue of an international enterprise, which points to ether as the representation of ownership share (the more you own, the more you control - which is not decentralization), shares are traded (bought and sold) through a network of CEXs (i.e., brokerages), and has comparison to a peer (I e., Google), a publically traded company. 🤔
Antonio Riveras
8mo
I still can't believe there are people calling #eth a shitcoin.
The DeFi Report | Adviser to Start-Ups & Asset Managers | ex. MITIMCo, Boston Properties
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