October 20th 2024
I’ve been vocal and skeptical of Ethereum’s “rollup centric roadmap”.
In a nutshell, it’s a scheme designed to help Ethereum scale by encouraging users to interact with cheap/fast Layer 2’s and making L2’s the primary users of Ethereum.
Essentially, Ethereum is going B2B so L2’s can serve B2C. Ethereum doesn’t want you using the network directly anymore! Unless you’re an L2. This transition is causing a ton of UX friction and problems:
- Switching between L2’s is a terrible UX
- Bridging between L2’s is a nightmare
- dApps are copied and forked across L2’s
- Liquidity is fragmented across L2’s
- Tokens can be issued on different L2’s
- Most L2’s are not decentralized
- Ethereum handed L2’s it’s revenue & competitive advantage
In it’s effort to scale, Ethereum has opened a window of opportunity for newer L1’s like Solana, Tron, Ton, Sui, etc. and they’ve stepped up. Switching costs are low and liquidity is fickle. The only “moats” Ethereum has is its community and its decentralization - which no one cares about except Vitalik.
While Ethereum “the network” is focused on scaling I’m afraid the community (aka it’s “leadership”) has lost sight of ETH “the token”. It’s become “not cool” within the Ethereum community to talk about price or implement improvements designed to increase ETH’s value.
For example, allowing L2’s to use their own token as gas shows a lack of care for generating demand for ETH. And Base, Coinbase’s L2, clearly sees this and is using the opportunity to generate demand for USDC.
Uniswap sees this and is launching it’s own L2, Unichain, in an attempt to attract all of Ethereum’s DeFi liquidity and drive demand for their UNI token.
If I sound bearish ETH, that’s because I am… sorta. I want to see the issues above resolved before I’ll believe Ethereum can maintain it’s market dominance and not go the way of MySpace.
Ethereum is capable of pulling this off. They migrated from Proof of Work to Proof of Stake without as much as a hiccup and that was a serious undertaking. Though I do think this time is different. Competition is fierce and Ethereum isn’t locking us in or offering anything worth sticking around for - yet.
To the moon 🚀 — @GΞR฿Z Founder & Creator @ BitLift
“The Cycle” Update
This week I fired off a short Twitter thread comparing where we are today to the past 2 cycles. I’ve talked in every newsletter about how September 2025 is my prediction for when Bitcoin’s top will be printed, so I worked backwards from that to see what it could look like IF this cycle went exactly like the past 2 cycles.
The blue bars represent the 2021 cycle and the red bars represent the 2018 cycle. As you can see, if it was 2021, we would be breaking out of the previous all time high THIS WEEK and top out around ~$210k. If it was 2018, we would have another 15 weeks before breaking out and then a WILD ride to ~$640k over a very short time frame.
Of course neither of these scenarios will happen exactly, but this bull market will certainly rhyme. I like to see what it could sound like to remind myself what’s possible and prepare myself for what’s to come.
Crypto Podcast Snips
Incase you didn’t watch to Part 1 - Global Macro, Part 2 - Bitcoin & Ethereum and Part 3 - Altcoins & Narratives of The BitLift Breakdown last week, here’s a few snips.
GΞR₿Z:“You Should Begin everyday with BTC zoomed out”
Brian Russ: “BTC still can make a 10X”
Brian Russ: “DXY could dictate a massive move in risk assets like BTC”
Keep Up With Crypto
What I’m reading, watching, sharing and keeping an eye on in crypto recently.
From the BitLift Discord:
@GERBZ: Latest details on the transition to Sonic
@trashpanda_11: Anyone holding SUI? I heard Raoul Pal talking about it a while ago. Didn't buy any because I know nothing about it. But he's very sold on it
@badjanitor: I have a small bag. I believe Raoul is on the board of the SUI foundation, and while I'm sure he does really believe in it, there could also be a little bias there.
@trashpanda_11: Yeah, he disclosed that. Poor guy’s just trying to pump his own bag
@igelthewolfie: Huh?
@ferenc127: yeah this is madness
@igelthewolfie:
