Bankless Co-Founder Explains Why He Sold All His Ethereum

2 hours ago

Bankless co-founder David Hoffman said helium sold his ETH aft concluding that the “ETH is money” thesis has mostly played out, marking a notable displacement from 1 of Ethereum’s astir disposable nationalist advocates. Hoffman said helium remains “massively bullish” connected Ethereum arsenic a network, but nary longer sees a wide way for ETH, the asset, to person a structural rerating from here.

“For idiosyncratic who built a career, community, identity, and concern astir Ethereum, this prime does not travel lightly,” Hoffman wrote. “The ETH is Money thesis didn’t fail… it played out. Ethereum got the ETH terms it deserves, and I don’t spot ETH being rerated arsenic an asset, higher oregon lower.”

The statement is not that Ethereum has failed. Hoffman’s thesis is much uncomfortable for ETH holders: Ethereum whitethorn proceed to win arsenic infrastructure portion lone a marginal stock of that occurrence accrues to ETH itself. In his framing, the web has go 1 of crypto’s astir important open-source systems, but its plan choices progressively favour applications, rollups and outer monetary assets implicit ETH’s ain monetary premium.

Hoffman Says Ethereum’s Monetary Window Is Closing

Hoffman described Ethereum arsenic a immense coordination game, wherever the “ETH is money” thesis required aggregate layers of the ecosystem to align astatine once. Ethereum needed decentralized leadership, responsive governance, accelerated method execution, coherent L2 incentives, and capable marketplace dominance to marque ETH the earthy monetary Schelling constituent of the ecosystem.

That, helium argued, was ever a constrictive path. “Money is simply a coordination game, and coordination is hard,” Hoffman wrote. “The Ethereum task itself is simply a stacked acceptable of coordination challenges crossed aggregate layers, and the ‘ETH is money’ thesis required each of them to succeed, and win with confidence.”

In Hoffman’s view, Ethereum made the harder architectural prime compared with Bitcoin. Bitcoin stripped its basal furniture down to elevate BTC’s monetary role. Ethereum added programmability and sought to maximize blockspace utility. That attack created tremendous aboveground country for adoption, but besides made ETH’s monetary presumption babelike connected Ethereum winning crossed technology, culture, governance and marketplace operation astatine the aforesaid time.

Hoffman said Ethereum achieved “some of the mode there,” but not the maximal mentation of the thesis galore ETH bulls erstwhile expected.

Fees, L2s And The Asset-Capture Problem

A cardinal portion of Hoffman’s statement is that smart-contract L1 tokens stay tied to activity, fees and revenue. He pointed to ETH’s dominance successful 2021, Solana’s resurgence in 2024, NEAR’s 2026 rerating alongside gross and pain growth, and long-running fee generators specified arsenic BNB and TRX arsenic examples of the marketplace rewarding chains that clasp oregon grow nonstop gross capture.

Ethereum, by contrast, has deliberately moved toward a operation wherever worth leaks outward. Rollups standard execution, applications seizure much of the user-facing margin, and Ethereum provides unafraid colony astatine debased cost. Hoffman described this arsenic a diagnostic of Ethereum’s ideology and architecture, but a situation for ETH arsenic an asset.

“At its heart, Ethereum is simply a giver, not a taker,” helium wrote. “It supplies L2s with the world’s astir unafraid blockspace, astatine cost. It tokenizes the assets of the full world, astatine cost.”

That framing sits astatine the halfway of his decision. Ethereum whitethorn beryllium “noble,” “good,” and “the world’s astir palmy non-profit,” Hoffman argued, but that does not automatically marque ETH a amended concern from this constituent forward. He said the rollup-centric roadmap means L2s tin instrumentality “97% margins,” portion the fat-app thesis leaves much economics with applications alternatively than the basal asset.

Stablecoins And The ‘Strong Crypto’ Problem

Hoffman besides argued that Ethereum’s inferior whitethorn progressively fortify different forms of money. He noted that Ethereum hosted $3 cardinal successful stablecoins successful 2020 and $163 cardinal today, a 54x increase. The network’s occurrence arsenic colony infrastructure, successful that sense, has helped grow tokenized dollars, not needfully ETH’s relation arsenic money.

He besides questioned whether the “strong version” of crypto (DeFi, NFTs, DAOs and an alternate fiscal strategy built for its ain sake) ever became a unchangeable capable taste oregon economical equilibrium. The infinitesimal erstwhile ETH functioned astir convincingly arsenic net money, helium argued, coincided with the COVID-era surge successful online activity, hazard appetite and nationalist fascination with crypto.

“ETH excelled arsenic net wealth astatine the nonstop infinitesimal everyone was forced onto the internet,” Hoffman wrote. “The satellite discovered cryptocurrency for the archetypal time, and for that little window, it was cool.”

The accusation is that ETH’s monetary premium whitethorn person depended connected a broader crypto-native roar that did not hold. Ethereum kept building, but the nationalist communicative astir crypto shifted backmost toward scams, grifts and speculation, weakening the societal instauration needed for ETH to go a ascendant store-of-value asset.

Hoffman closed by stressing that helium is not bearish connected Ethereum itself. His decision, helium said, reflects a superior allocation telephone aft the “ETH is money” thesis reached a mature outcome.

At property time, ETH traded astatine $2,080.