In brief
- Consensys CEO Joe Lubin says his firm is talking to institutions in a “very big” country about building on Ethereum.
- Lubin, an Ethereum co-founder, thinks decentralized protocols will lead the new global financial system.
- He and Consensys recently led a $425 million investment in SharpLink Gaming to create an Ethereum treasury.
Ethereum co-founder and Consensys CEO Joe Lubin said Tuesday that his firm has been in talks with “major sovereign wealth funds and banks” in a “very big” country about potentially building on Ethereum. Will they buy ETH too?
In an interview on Rug Radio’s latest “Fomo Hour” episode, Lubin spoke at length about crypto’s second-largest asset, predicting that the start of a new, ETH-driven decentralized supercycle may be coming soon. (Disclosure: Rug Radio and Decrypt share a parent company in DASTAN, and Consensys is one of 22 investors in an editorially independent Decrypt).
“There’s structural fatigue in the financial system. It’s breaking,” said Lubin. “We’re at the end of a supercycle, effectively, and the excesses of the financial industry, the financialization of America, the hollowing out of the middle class in America, is leading us all to essentially the end of this supercycle.”
“Decentralized protocols are the answer to bringing forth a new global financial system,” he added.
That decentralized and global financial system might have a new participant shortly, according to Lubin, who indicated that his firm has been talking to banks and sovereign wealth funds in an unnamed country about the Ethereum ecosystem.
“We’re talking to major sovereign wealth funds and banks in a particular country who are interested in, ‘How do build infrastructure in the Ethereum ecosystem?’” he said, suggesting the path forward may contain infrastructure on Ethereum layer-1 and their own “constructs at layer-2.”
Sovereign wealth funds and nation states have previously rallied around Bitcoin, adding it to balance sheets and treasuries in the process.
Would a big country making a commitment to Ethereum be an impetus for a sizable investment in its native currency, ETH? It seems plausible, but ETH has typically been overlooked as a treasury asset until just recently.
Last week, Lubin and Consensys made headlines by leading an investment into publicly traded SharpLink Gaming, which generated $425 million in financing to kickstart its new Ethereum treasury. Lubin now serves as Chairman of SharpLink’s board.
SharpLink’s treasury will operate slightly differently from the one popularized by Michael Saylor’s Strategy (formerly MicroStrategy), which largely buys and accumulates Bitcoin, creating Bitcoin yield or more BTC per share.
Instead, SharpLink will look to use Ethereum proactively, Lubin said, taking advantage of “staking, restaking, and DeFi at prudent risk levels,” to add yield.
SharpLink stock has been highly volatile following the move, including falling sharply on Monday, swinging back upwards early Tuesday, and then returning to the red by the end of the trading day. Even so, SBET is up 922% over the last month.
The Ethereum co-founder has maintained optimism for ETH and the Ethereum ecosystem amid recent ecosystem turmoil and comparative price underperformance. He called Ethereum the “middle child” relative to Bitcoin and Solana, which he said both had clear messaging around their respective ecosystems and value propositions.
“Ethereum, the middle child, was sitting there planning for the future,” said Lubin. “We’re trying to do all the things right and build epic infrastructure for our broadband moment. And so Ether price goes down, and narrative follows price,” he said of the stigma that has followed the asset’s financial underperformance in the last year.
“But really, things were going great in the Ethereum ecosystem,” he said.
And in the future, Lubin believes Ethereum might even become the big brother. When asked if he thought Ethereum could ever overtake Bitcoin due to its productive asset capability, Lubin said, “Ether is somewhere between the world computer, electricity, energy, [or] oil—or what I really like is Ether being seen as the most valuable trust commodity on the planet.”
“Satoshi Nakomato invented this most profound thing, decentralized trust, the highest-grade trust in the world,” he said of Bitcoin. “And I think of Ether now as the gold standard in trust, or highest-octane trust, etc. So will that be more valuable than Bitcoin? Seems very likely.”
Edited by Andrew Hayward
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