This episode explores the critical shift in Layer 1 blockchain valuation, moving from speculative hype towards revenue generation and utility, as institutional interest reshapes the crypto landscape towards Web3 banking.
Eve LaRose Introduction & Crypto Journey
- The discussion features Eve LaRose, CEO and founder of the EOS Network Foundation and Exat (a Bitcoin scaling solution). Mike, the host, highlights Eve's extensive 15-year experience in the crypto space, dating back to mining Bitcoin on a laptop in 2010.
- Eve's background combines deep technical understanding with an economist's perspective, providing a unique lens through which to analyze the evolution of the blockchain industry.
Evolution of Smart Contract Platforms: From Concept to Institutional Interest
- Eve traces the evolution of blockchain technology, starting with Bitcoin's initial proof-of-concept for value transfer, comparing its early collaborative compute power usage to projects like protein folding. Smart contract platforms, as we know them, didn't exist initially.
- The arrival of Ethereum around 2015 introduced smart contract capabilities, though use cases remained limited. The 2017 CryptoKitties phenomenon marked a turning point, demonstrating real-world demand that overwhelmed network capacity, signaling the potential for broader applications and sparking the race for scalability.
- The subsequent "ICO summer" saw a surge in Gen 3 Layer 1 blockchains focused on scalability, enabling rapid global fundraising but also leading to many unsustainable projects. Eve reflects on the initial optimism: "I remember I thought this is it. We're going to hit mainstream adoption... Blockchains can finally meet the demand."
- Eve contrasts this early, often cypherpunk-driven era with the current landscape (2021-2025), characterized by mature institutional capital, sophisticated stakeholders (Wall Street, banks, family offices), and the legitimization of crypto tokens as an asset class, demanding different use cases and higher standards.
The Changing L1 Competitive Landscape: Beyond TPS
- Eve discusses the shift in how Layer 1 (L1) blockchains compete. Initially, the focus was heavily on technical specifications, particularly TPS (Transactions Per Second) – the measure of how many transactions a network can process each second – often benchmarked against systems like Visa.
- However, this technical focus often neglected product usability. A significant shift observed over the last ~3 years involves L1s prioritizing user-friendly products, moving away from the "blockchain everything" approach.
- Successful platforms now abstract away the underlying blockchain complexity, integrating the technology selectively where its core features (like trust and transparency) add specific value, rather than forcing it into every component of an application. This leads to products that feel closer to familiar Web2 experiences.
Current Market Inflection Point: Bitcoin, ETFs, and Regulation
- Eve identifies three key trends shaping the current market inflection point over the last 1.5-2 years:
- Renewed Focus on Bitcoin: Builders are increasingly returning to the Bitcoin ecosystem, developing scaling solutions like Exat (which Eve founded) to unlock the utility of the largest crypto asset. Exat functions as a Bitcoin transport layer, currently holding significant TVL (Total Value Locked) – the total value of assets deposited in a decentralized finance protocol.
- Impact of Bitcoin ETFs: The launch of US Bitcoin ETFs (Exchange-Traded Funds) – regulated investment vehicles tracking Bitcoin's price – has brought in mature, institutional capital with different expectations and requirements.
- Shifting Regulatory Tone: Particularly in the US, there are signs (symbolism) of a potentially less adversarial regulatory stance, suggesting America might be more "open for business" for crypto innovation, although concrete legislation takes time.
- These converging trends, according to Eve, set the stage for the significant growth of "Web3 banking and open finance."
EOS Rebrands to Vulta: The Big Announcement
- Eve announces the rebranding of the EOS blockchain to Vulta. He provides context: EOS launched 6.5 years ago but initially suffered from a lack of development, funding, and a central guiding entity like a foundation.
- Eve, initially a community validator, established the EOS Network Foundation 3.5 years post-launch to revitalize the ecosystem. The rebranding process involved regaining control of IP, social media, and code repositories.
- The name "Vulta" was chosen for its connection to ledgers ("Volta") and security ("Vault"), reflecting the network's six-and-a-half-year track record of zero downtime and no hacks. This strategic move aligns the brand identity with the foundation's long-term investments and product development focused squarely on the Web3 banking and open finance sector.
Vulta's Strategy in Open Finance: Regulation, Reliability, Customization
- Addressing how Vulta will compete in the open finance space, Eve highlights key strategic differentiators beyond just speed:
- Regulatory Positioning: The EOS Network Foundation is incorporated in Canada, a jurisdiction known for its stable democracy and strong banking sector. Eve argues that operating from a well-regulated, traditional finance-friendly jurisdiction will be crucial for building trust and offering compliant financial products, contrasting this with jurisdictions chosen purely for crypto leniency. This requires adhering to established frameworks, even outside specific crypto rules.
- Predictable Performance: While speed is important, Eve emphasizes the greater value of predictable costs and reliability for businesses operating on the blockchain. Vulta offers low transaction costs, but the consistency of these costs is presented as a key advantage over networks where fees fluctuate wildly with congestion.
- Flexible Compliance: Vulta, while a public permissionless blockchain, enables the creation of "permissioned gardens." This customization is vital for institutional use cases requiring KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance – regulatory checks to verify identity and prevent illicit financial activities – allowing institutions to create compliant walled environments for specific financial products (e.g., Bitcoin yield generation).
The Future Value Proposition of L1 Tokens: Beyond Speculation
- Mike poses the critical question: Why should investors hold L1 tokens in the future, especially when alternatives like Bitcoin exist and many L1s haven't hit new highs this cycle (except Solana)?
- Eve draws an analogy to the early internet bubble, where companies were valued based on website views. He argues the crypto market is similarly immature, with many L1 valuations based on speculation rather than fundamentals. "There's going to be a time and a place... where now companies are going to be valued based on how much revenue they generate."
- He predicts a market maturation where L1s will be increasingly valued based on tangible metrics: revenue generation, underlying utility, and sustainable economics (akin to P/E Ratios – Price-to-Earnings Ratio, a traditional stock valuation metric). Investors, especially institutions, will shift focus from hype to networks demonstrating actual financial viability and value capture.
Closing Thoughts & Next Steps
- For current EOS holders, a swap mechanism to the new Vulta token will be available (ticker to be announced in early May).
- Eve mentions ongoing trading competitions on Binance and PancakeSwap for the EOS token.
- He directs listeners interested in earning yield on Bitcoin to Exat (exat.network).
- Eve can be reached via his handle "Big Beard Samurai" on X (formerly Twitter) and Telegram, or through the EOS Network Foundation.
The discussion underscores a pivotal shift for L1s towards demonstrable revenue and regulatory compliance, driven by institutional finance's entry into Web3 banking. Crypto AI investors and researchers must now prioritize fundamental analysis of L1 business models and their strategic positioning within this evolving landscape to identify sustainable, value-generating investments.
