Metals, Mag7, and Macro: The Future of ETH on the Public Markets | Joseph Chalom & Zack Guzman

All right. Up next, we have a talk on metals, mag 7, and macro, the future of ETH on the public market. So, I will pass it off to Zach Guzman, founder and host of Coinage, who will be moderating.

Thank you very much. Hello, everybody. How are we doing today?

Very good. Early early sesh. Still early sesh. I'm joined today uh by Joseph Shalom, the CEO at Sharplink, one of the largest Ethereum digital asset shre. Oh, there there is applause here, Joseph, for you.

Very good to kick off.

Brought a lot of family here.

He travels well. But also spent 20 years or so at Black Rockck as well leading digital assets over there. So, a lot to get into. Uh and maybe just to kick off maybe for for those who still don't really know how DATs fit into the entire ecosystem. You and I were talking before we came up here.

Uh about $1.7 billion worth of ETH that that Sharpink has right now. Uh what is this year going to be about in the DAT space?

Uh sure. F first of all, thank you for having me. Everyone is telling me we're in DAT 4.0. It's been around for 7 months.

Uh there's not another industry where 7 months in you're in V4. I think we're in version 1.5. Last year was about reinventing the idea of a digital asset treasury, not for Bitcoin, but for a productive asset like ETH. And last year you saw about seven to nine digital asset treasuries, Bitmine, Sharplink, and a whole long tail who basically tried to raise capital to give investors a different ownership structure over ETH largely because there was a view that owning spot was difficult for a lot of institutions and even the ETFs including the ones I launched at Black Rockck cannot stake and if they can stake because of the entrance and exit they're staking a very small portion and if you have a productive asset natively like ETH you need to be in the business of making it productive and so I think uh a number of us launched some of us reached exit velocity some of us did a decent job explaining that there's a thesis but more importantly the entire purpose is not only to raise capital and give investors opportunity to get exposure it is to promote the Ethereum ecosystem and adoption in the real world.

If you do that well with benevolent capital, we will be a force for good for the entire ecosystem and everyone in this room.

Yeah, that's what I wanted to get into because, you know, there's so many different metrics that people point to, whether it's MNAV, the idea of, you know, where shares are trading relative to how much ETH one of these DATs may hold. uh inflows, outflows from the ETFs like the one ETH at Black Rockck that you helped launch like all of this kind of what are the metrics that you're looking for to capture that element of how you at Sharplink are helping boost the Ethereum ecosystem like what is it that you want to see this year are most excited about that maybe people are sleeping on.

Sure. I think there is a northstar metric which is not ETH accumulation at all cost. You can dilute investors and do really bad things in the name of accumulating ETH. It's ETH concentration per share. How much ETH can we concentrate in each share by raising capital accreatively, staking it, and getting the yield back on the balance sheet?

What I care most about in 2026 is doing everything we can to bootstrap the ecosystem. Um, there's something missing in the ecosystem, which is what I call permanent benevolent capital. A lot of crypto is short-term. there's no term structure like the idea of TVL in many protocols is missing the L you know this idea that you have locked capital but you really don't so one of the things we've been very very focused on is staking all of our ETH but also starting to partner in the ecosystem and I'll share if it's okay one quick case study

sure

last year we partnered with consensus line etherfi and I cloud to create something that exists today it's a liquid restaking token, but we did two things differently because we're trying to raise standards. First is we committed this capital for multiple years. So the idea of putting the L in TVL, which is good for the protocols. The second thing is, and it might be controversial for some people in this room who deeply believe in non-custodial custody, but if you're uh if you're the holding capital, you're the steward of capital, billions of dollars of ETH for institutions, we believe strongly that you need to reduce the ops risk. So, not only did we build this liquid restaking token, we got incentives to lock up our ETH, which is good for investors.

You're starting to get DeFi level yields. We did something that had never been done before is we worked with Anchorage, our qualified custodian, to now support DeFi in a wrapped custody um wrapper. And it turns out you can generate alpha through committing that capital for the long term. But if you can also reduce operational risk and stay in a QC, that is ops alpha. And I know there's this idea of institutional DeFi.

Vitalik talks about safe DeFi. We're starting to not only push the efficient frontier of returns, but we're also doing it by reducing operational risk. At some point, DeFi wallets will be as safe as custody. Until they are, we're going to help provide that that feedback for people. Well, I think what's interesting just to just to take a step back and think about where ETH was when the DAT enthusiasm was just getting started, maybe seeing some of that win, some DATs going their own routes and taking different decisions for you at Sharp Link as you look at Bitine and some of the other major players.

I mean, uh what's kind of the selling point now to the Ethereum builders? uh which was easier when when price was up only to kind of looking at some of those metrics. Um given the fact that you know some of these other dats are starting to get very uh I think we're starting to see some specialization when it comes to what Bitmine wants to do with investing in Mr. Beast when you're seeing Ethzilla uh try and tokenize Jets I think is one of the things they're working on. So what how do you kind of see that differentiation happening?

F first of all let me stay positive. I want as many DATs to succeed as possible because if they do we're going to bring a new capital into the ecosystem. They're going to buy ETH. The price is going to go up and they're going to deploy that ETH to protocol sitting in this room. So one there's there's a force called coopetition.

You can cooperate with people have the same mission and at the same time compete. I think the second thing is we didn't understand how misunderstood the Ethereum opportunity was. Bitcoin has a singular narrative. It has for years. It's no one is competing with Bitcoin.

And then you saw Solana and a whole host of other chains come out and win mind share. They won share by spending money. And I think one of the important things that I did at BlackRock was educate investors on what Bitcoin and ETH is. I'm probably spending 60 to 70% of my time going around the world and explaining to people what the Ethereum opportunity is and how it's fundamentally going to change finance and after finance it's going to change civilization. I know what you're doing in terms of uh democratizing ownership in a cooperative media company.

I think that is like one case study that is going to be rinsed and repeated. But I think there's a misunderstood view that we're just financial engineering. We are literally meeting with thousands of people around the world and telling them what Ethereum is and what it can be because it lost its narrative for a while and we need to regain it back because it's true. It's right and it is going to be the future rails of both finance and parts of civilization.

Yeah. I mean, well, thank you for opening the door for me to shill a little bit of what we're what we're doing at Coinage, too, because like Ethereum Denver, being a US-based Colorado co-op, trying to tokenize ownership over a media outlet. It's been very fun to kind of pay stable coin patronage dividends back to people and open that door. But it's something that you and I probably agree on this idea of tokenization moving beyond just securities and assets that maybe Wall Street certainly is going to continue to pursue and add money to, and you're going to see that overall number rise. But you and I before this were talking about potentially smart contracts between governments coming onto Ethereum.

I mean what are the other pieces of tokenization that you're most excited about beyond just maybe what you did at at Black Rockck.

So I think it is going to start with step function increases in finance. You know I had a front row seat for 20 years on a broken ecosystem. The exact opposite ecosystem of Ethereum. It wasn't programmable. It wasn't decentralized.

It settled in 1 to 3 days. And frankly, there were intermediaries who took tons of friction out of the system. I'm going to share something controversial, which is I do think we need to prove it in finance. And if you can prove it in finance, you can prove it in almost any other governance setting. I see a world where broken governance and cooperative buildings in New York are going to be happening on Ethereum.

I see worlds where treaties are going to be formed on a on Ethereum with smart contracts where they just self-execute. you test a nuclear device and it's in violation of the treaty, $50 billion moves from one wallet to another. I do think we need to think really benevolently of what we can do. But the controversial thing is I think we have to do it in finance, prove a case study that tokenization works and then it'll open up the door to both cooperatives and all other forms of governance that are just better than what we have today, but prove a case study that works. I think right now we're trying to boil the ocean.

Yeah. Well, I think also obviously we're in we're in Denver. Uh and you know for the US Paul Atkins SEC chair going to be here and and it was a bit of a a three years lost when it comes to if you tried to give anything that was real ownership to people. You got sued and had to deal with that. So it was a bit of a of a delayed process.

But I know you've been traveling all around the world. So I don't want to be too US- ccentric when it comes to that. But what's maybe one thing that you're seeing in those markets? and he just got back from Hong Kong. You're seeing from the the ETH OGs, so to speak, that

I I actually was shocked by the level of ETH forwardness in both Hong Kong uh and frankly in Seoul, which surprised me. I think right now this went from being a technology question and a regulatory question to what I observed in Tokyo, Seoul, Hong Kong and on my past trips in Europe is this is becoming a geopolitical race. And what's interesting is regulators and policy makers were the enemy for a long period of time and now around the world they're looking to see what's happening in the US. They see a government that is putting tokenization and stable coins first. And I'm not sure it's always for altruistic reasons, but like let me share one fact.

About 65% of all stable coins run on Ethereum. Great. But 99 plus% of stable coins are US dollar denominated, which means a stable coin has to buy treasuries to back it. Well, Circle and Tether are the 12th largest creditor of the US government. So like there's a reason why the US government is pushing stable coin legislation because it's good for our national interest.

You're starting to see in Hong Kong, Seoul, Tokyo, and other countries, Abu Dhabi, they feel like they're going to lose control of their currencies and finance is going to move to dollarization. So you're starting to see a massive imperative for geopolitical reasons for these local institutions to build Ethereum capabilities to build a decentralized and digital economy because they want to compete with the US and not be left behind. And you know you went from policy makers and regulators hating us to realizing that if they don't adapt, they fail. I guess one of the one of the questions that keeps coming up too from our coverage at Coinage is kind of bridging the gap between everything that people are excited about and you're just kind of laying out a few of the the bull uh cases there, adoption increasing, Wall Street coming on chain, tokenization of everything and yet price go down. So how do you kind of pair those things with the idea of on the one hand it may just be that Bitcoin's price is kind of tracking software software is down so there you go.

Um, other people could say, well, I don't know, is the DAT theory breaking down? That enthusiasm may be waning if that was the main driver last year. How do you kind of look at what is the next catalyst to to turbocharge things?

Yeah, there's a narrative that drives me crazy. And the narrative is ETH should be a coefficient in value to Bitcoin. Like there's an argument, oh, ETH should be twothirds of Bitcoin's value. It completely misses. There's two things that miss the mark.

saying that ETH is derived off Bitcoin's value and two making wild price predictions. I think a better way to think about ETH is that it has genuinely intrinsic value. And there's actually a I was in Seoul. I met with Simon Kim from Hashid. He has a website that everyone should check out.

It's called ETHV val like valuation.com. And it gives 12 different ways you can think about the value of Ethereum from TVL to gas fees to revenue. I think we need to stop comparing ourselves to Bitcoin and grow up and provide more utility than any other token or ecosystem in the history of the world. And then people will recognize there's intrinsic value in what this community is doing.

And it's going to appear in use cases, but it also needs to just like we need to stop being the little brother of Bitcoin.

Like it's a it's an infuriating narrative that we're only a portion of what Bitcoin is. Well, I'm sure it's also probably infuriating for you, too, when people kind of talk about Sharplink and compare you to kind of the little brother of strategy and like what Michael Sailor probably did and no, it's not at all what we're trying to do.

You know what's interesting? It is and it isn't. Um, Michael Sailor deserves a lot of credit for pioneering a new business model. This idea that you can give someone exposure to a token in a very simple wrapper and try to use financial engineering to drive yield. The beautiful thing about ETH is it's better.

It's natively productive. You could just stake it, secure the ecosystem, and um we're different than they are. And we'll, you know, the DAT industry will go through ups and downs, but if you have never encumbered your ETH, we're one of the few people in the world along with Tom Lee that has generational permanent capital.

Like we don't have to sell it. Yeah. We're not a fund, which means you could do really benevolent things in the ecosystem. And the example I gave of partnering with DeFi, we need to rinse and repeat that and allocate to the people in the room, to the protocols, to the builders, and to the innovators and prove to people that DeFi and protocols are safe and institutions should start doing their business in DeFi rather than the more risky concentrated central finance. So, um, I I I believe very very deeply that we're actually at a really positive inflection point.

Don't get down about the price. Just keep on building and providing utility. We are going to see a flight to quality and utility and ETH is winning and ETH has the license to win because it's actually giving value.

Yeah. I mean, I think that was the component too that you had mentioned around stage one of kind of tokenizing things. obviously the ETFs, the biddal on a few different uh speeches that I've seen, the digital asset complex. When you start to plug these things in, when you can use one for collateral, what that starts to unlock when you start injecting the ETH that Sharplink may have into these ecosystems, I mean, how how quickly do you see that playing out where you can start to plug and play some of these existing tokenized funds?

I I think there's right now a significant lack of liquidity in the entire ecosystem. We saw what happened on October 10th. It was one of the biggest deleveraging events in history. You're starting to see that in gold when things are very thinly traded. One sale or a gap in bid ask can really drive the price down.

I think what's going to be really important if you have permanent capital is to deploy it where it's needed. I'll give you three examples. Prediction markets are going to be huge. I think they're going to happen on Ethereum. But guess what?

They need capital to provide liquidity to what's thousands of different prediction bets. insurance pools that are being built on Ethereum need permanent capital in ETH to ensure protocols. So, you're going to start seeing case data case study after case study where people need the capital to bootstrap the Ethereum ecosystem. And we need to do it in a benevolent way, not like a hedge fund, not like a short-term investor, but someone who actually has a vested interest in ETH going up and the Ethereum ecosystem growing up. one of the I mean I guess the the big question that I I'm I'm excited to kind of stick around and learn more and all the other panels uh here at ETH Denver to kind of start to figure out what the new narrative is going to be.

Uh obviously right now this rotation away from kind of the L2 road map back onto ETH mainet and seeing a lot of uh I guess transactions moving back down there. Um, is there something that you're calling out now when you look at that playing out in addition to, you know, ETH having the lead not just in stable coins with these other chains that I think is something that maybe we should highlight?

Yeah, for about 7 months I've been telling people what I think the Ethereum opportunity is and I think it's largely been around tokenization, stable coins, and really good DeFi protocols. I think what people are not factoring in at all is what is a buzzword but is actually not really factored into the price of ETH is is this it's just going to be the AI agent economy. If you look back when we look back in 3 years we will have seen 2024 and 25 be the age of the beginning of like AI assistance to generally help you with your day-to-day maybe with vibe coding. You're starting to now see task specific AI agents which is like the entrylevel drug which is going to start seeing AI agents collaborate and you're going to see an Ethereum machine agentic economy

and it's going to require transaction volume through transaction volume throughput that can go up 10,000x of what we're seeing today. It's going to bring TVL. These agents are going to have to pay one another in something. It's going to be a stable coin. It's going to happen on Ethereum and you're going to end up building a an agentic machine economy like we've never seen before.

I don't know if that's going to be the end of 2026 or 2027. We need the people in the room to build the guard rails so the agents don't giving our don't you know

look there's a difference of paying out a pizza

and moving $5 billion like reputation is going to matter guardrails is going to matter. smart code is going to be matter, but I think people are vastly underestimating how Ethereum is going to win in the decentralization and the AI agent economy. It's going to be massive.

Yeah. Well, I I know we're coming up on time and I know you made the point around uh cooperative building among the DATs. It has been interesting. I know I know Tom Lee and Bitmine have been kind of pounding the table on we want to hit 5%, the alchemy of 5%. I don't know if there's a goal for you if the message is just we're just going to keep scooping this up for for as long as we want.

I I don't know if you've looked at kind of if there's a slogan there for sharp link as we wrap this up. If there's if there's a maximum number that Joseph Shalom can

Well, first of all, it's going to be Ethereum with an edge. Yes. Meaning we're not just hoarding Ethereum for the sake of hoarding Ethereum. We're going to be the most productive, the most disciplined, and we're going to generate alpha for our investors. 5% is the right number.

I think you start risking decentral uh centralization challenge if you go above it. But I think the more important thing is to actually take that capital and put it into the builder ecosystem into protocols so you can be benevolent. Yeah. So like I don't have an alchemy of 5%. I want to be the most disciplined that others are doing really unique things.

They're buying engines. They're investing in media companies. That's wonderful. I'm going to focus on this ecosystem.

Yeah. Well, I think we're on time, but Joseph Sloan, CEO of Sharplink, can't thank you enough, man. Appreciate it.

Thank you for having me, everyone. Thanks, guys.