Bankless Founder: Why I Sold My ETH

📄Full Article· Automatically extracted by trafilaturaGemini 翻譯3850 words

Bankless co-founder David Hoffman publicly sold his ETH and wrote a long essay explaining his farewell to the "ETH is Money" thesis. He stated that Ethereum as a network and ecosystem still holds enormous potential, but the opportunity for ETH as an asset to be repriced has already played out. (Background: Wall Street no longer loves Ethereum: Why have fundamentals and ETH price diverged?) (Background: Perspective: What exactly caused Ethereum (ETH) to lose its vitality?) I sold my ETH. For someone who built his career, community, identity, and business on Ethereum, this decision was not made lightly. If you missed last week's news — tl;dr: The "ETH is Money" thesis didn't fail, it has played out. Ethereum got the ETH price it deserves, and I don't think ETH as an asset will be repriced, either up or down. p.s. I am extremely bullish on Ethereum. I expect Ethereum as a network to continue performing exceptionally. But I think only a tiny portion of this success will be reflected in ETH. Below is the article content compiled and organized by BlockTempo: Money is a coordination game, and coordination is hard. Ethereum itself is a whole stack of coordination challenges across multiple layers, and the "ETH is Money" thesis requires every single layer to succeed, and to succeed well enough to build market confidence. There is only one condition for ETH to become money: every layer in Ethereum's techno-social stack must outperform its competitors. Given the ambition of the Ethereum project, achieving the "most successful version of Ethereum" was always going to be an enormous challenge. Despite various shortcomings, the Ethereum project has done extremely well and deserves the market cap it has now. However, the window of opportunity for $ETH to be "repriced" by the market appears to be closing. ETH is, to some extent, money. But not the most successful version that we once pursued together. A Turing-complete blockchain is such a powerful concept that Ethereum's maximum potential was the entire crypto industry — taking it all. The only obstacle to Ethereum achieving 100% dominance over everything was coordination. - Foundation level: Ethereum's leadership must be sufficiently decentralized, and governance needs "rough consensus" to establish credible neutrality, in order to maximize Ethereum's adoption. - Market responsiveness: Ethereum's leadership must remain responsive to market dynamics and operate like a startup facing an existential threat of being phased out. - L2 autonomy and binding: Ethereum L2s must be able to make market choices independently of the base layer, while being economically bound to the overall Ethereum economy and brand. - Roadmap cadence: The execution order of Ethereum's roadmap must maximize and preserve Ethereum's momentum and market dominance, suppressing competition to boost confidence in ETH. - Technical speed: Critical technology must be researched and engineered at a fast enough pace that Ethereum can both prove its utility externally and continue to stay ahead of competitors. At the core of the "ETH is Money" thesis is to produce a financial asset so revolutionary, so powerful, that by virtue of its unique nature as a "global store of value," it forces originally indifferent people to actively hold it. The Ethereum brand and ETH's strength must be strong enough that not only do baby boomers feel safe, they are drawn to hold ETH as a meaningful position in their retirement portfolios. For "ETH is Money" to come true, everything upstream of ETH had to be executed to a very high standard. Ethereum is not Bitcoin — it chose the hard road. Bitcoin chose to strip everything away from the blockchain to elevate BTC's status. Ethereum chose to stack everything onto the blockchain to maximize the utility of its block space. Only by doing this in the best way, and before competitors, could ETH possibly achieve the status of global money. We got partway there, and Ethereum has earned the share of maximum potential market cap it deserves. What concerns me is that the time window of this game has closed. Looking back over the years, I see a huge amount of environmental challenges Ethereum should have overcome. No matter how you criticize the difficulty of valuing smart contract chains by fees and revenue — fees and revenue are clearly how an L1's native asset increases its pricing power. By 2026, we have a wealth of data showing these things are tightly correlated: L1 activity, L1 fees, L1 native asset price appreciation. - 2021: ETH's dominance appeared when its L1 revenue market share was highest. - 2024: SOL's dominance appeared when its L1 revenue market share grew uniquely relative to the rest of the industry. - 2026: NEAR is undergoing a price repricing, accompanied by fundamental growth in L1 revenue and NEAR burns. You can also look at BNB and TRX — perhaps the two projects with the highest cumulative revenue in history. Their price action is exactly what I had expected ETH to look like — if ETH had been able to maintain a higher L1 fee market share after 2022. @0xMakesy put it well: Ethereum represents the "strong version" of crypto — crypto for crypto's sake, self-sustaining and self-perpetuating. DeFi, NFTs, DAOs — we are the rebels, building an alternative financial system by the people, for the people, plugging imagination into money. There is also the "weak version": efficient ledger infrastructure for the backend of financial institutions. The weak version was supposed to fuel the strong version, converting demand for network ledgers into inflows — into crypto, into Ethereum, ultimately converging onto ETH. Perhaps, if Ethereum had executed better, faster, stronger, and if the crypto industry hadn't attracted such a huge crowd of scammers and predators, the industry would have long since won the prestige and respect I always thought it deserved. But the only period in which crypto had a positive brand in the eyes of the public lasted only from late 2020 to early 2022. Outside of that, crypto's reputation has consistently been scams, fraud, get-rich-quick schemes, and being useless to ordinary people. ETH's outstanding performance as "internet money" happened to coincide with the moment the entire world was forced online. The world discovered crypto for the first time, and in that brief window, it was cool. Money is a coordination game, and the Schelling point of a money is sustained by belief. In 2021, broader society believed in ETH: it was cool, disruptive, populist. Bitcoin shared these qualities, and after 2021 was much better at holding onto these qualities than ETH was. This raises an unsettling possibility: the strong version of crypto may never have been a stable equilibrium. COVID was an extremely distorted monetary era, and perhaps ETH's status as money could only hold up under that distortion. If so, then ETH becoming money depended from the start on the "strong crypto" version performing better than it actually did. Is Bitcoin money? Is the dollar money? Is gold money? It doesn't matter — whatever is money will be tokenized on Ethereum. In 2020, Nic Carter argued on Bankless that stablecoins were likely parasitic to ETH as Ethereum's native unit. At the time, Ethereum had $3 billion in stablecoins. Today there is $163 billion — a 54x growth. The utility Ethereum provides is helping strengthen the monetary network of "whatever is money," which is exactly why the US is so bullish on stablecoin adoption on crypto. Ethereum is helping the US maintain dollar hegemony, and this is also the explicit policy of the current administration. The positive spillover effects on $ETH as money are clearly far less than the value the US government sees in Ethereum's stablecoin ecosystem. Ethereum's essence is a giver, not a taker. - It provides the world's most secure block space to L2s at cost. - It tokenizes the world's assets at cost. - It secures billions of dollars in DeFi assets at cost. Ethereum doesn't mark up anything it does. This is the nature of open-source software, and this is Ethereum's strength. Ethereum supplies the world with a critical suite of value — at cost. Ethereum is noble. Ethereum is good. Ethereum is the most successful non-profit organization in the world. Naturally, massive adoption will happen on Ethereum. It is, and will continue to be, perhaps the most impactful open-source software project humanity has ever built, and being a "non-profit protocol" is one of its core characteristics. This is why ETH's path to money requires sustained, extremely high market dominance. Eventually, fees will trend toward zero as block space gets commoditized. As long as the one doing the commoditizing is Ethereum and not a competitor, Ethereum can keep its profits and dominance. Eventually, the Fat Protocol thesis will give way to the Fat Application thesis, and the application layer will eat the remaining profits. As long as they are applications on Ethereum rather than competitors, this is fine for ETH. "ETH as money" and "Ethereum as giver" are hard to reconcile. Ethereum's architecture is deliberately designed to give everything back to the ecosystem, taking only the minimum necessary to maintain the network. Architecturally, ETH is not prioritized within Ethereum — this is a feature, not a bug. ETH only becomes money if Ethereum wins a battle it architecturally refuses to fight. This is feasible when Ethereum can maintain extremely high market dominance. "ETH as money" requires everything about Ethereum to go right. The margin for error is much smaller than I originally thought. Ethereum's momentum in 2021 and 2022 made "ETH as money" look like the default path. In hindsight, Solana's rise in 2021 accompanied by surging anti-Ethereum sentiment was the first major signal that Ethereum's and ETH's coordination game was not going according to plan. - The Ethereum Foundation needed to decentralize, allowing alternative power structures to emerge. But it also needed to respond to the market with the urgency and momentum of a startup facing an existential threat of being phased out. - L2 teams needed the freedom of self-determination, but also needed to operate under the larger brand umbrella of Ethereum and ETH. Synchronous technical integration between Ethereum and its L2s needed to be executed faster. - Smart contract chains are valued by fees, and to escape this paradigm, Ethereum had to rewrite the rules through the "brute force of success." It simply didn't reach its maximum potential. Ethereum did the noble thing, choosing the hardest, most ambitious, ideologically purest path for the future. It achieved some breathtaking victories and lost some challenges. Ethereum has earned the market cap it deserves. I am extremely bullish on the Ethereum network and its ecosystem — Ethereum's architecture is designed to maximize the success of its applications, L2s, and ecosystem. The Fat Application thesis means Ethereum's applications take all the fees, and the Rollup-centric roadmap means L2s take 97% of the margin. As for ETH the asset, it's harder for me to see it being structurally repriced — either up or down. So my reason for selling ETH is not that I am bearish on ETH, but because I think the "ETH is Money" thesis has played out, and I want to allocate capital to other opportunities I see in the market.

Data Status✓ Full text extractedRead Original (動區 BlockTempo)

🔍Historical Similar Events· Keyword + Asset Matching6 items

2026-05-31

Six Accusations from an Ethereum Developer: ETH Lost Not to Rivals but to Itself

Similarity 320%標的 ETH關鍵字 eth同分類 zh

2026-05-28

Standard Chartered: Ethereum is now like Amazon in 2001! ETH to hit $4,000 by year-end and $40,000 by 2030

Similarity 320%標的 ETH關鍵字 eth同分類 zh

2026-05-27

Bitmine massively bought 112,000 ETH in a single week! Tom Lee reiterates the crypto super cycle: Wall Street tokenization plus AI agents as dual engines

Similarity 320%標的 ETH關鍵字 eth同分類 zh

2026-05-26