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The ETHDenver Newsletter Edition 🕺 🎉

Ether Capital Newsletter
Ether Capital Newsletter
We’re back on Canadian soil 🛬 (with lots of free swag) after an intense week of learning, hacking and networking. These are the highlights from our trip to ETHDenver! 🏔️ 😎

Perhaps it was the hype around NFTs and the metaverse, or just pandemic FOMO, but this year’s ETHDenver conference reached a new level of crypto insanity. 🎆 🤯
Packed House 🚀
Sports Castle (Main Venue)
Sports Castle (Main Venue)
More than 12,000 people showed up to ETHDenver 2022 and the lineup just to get into the main venue was two hours long. 🕐 To give you a sense of how massive this year’s event was, Bankless’s David Hoffman shared a year-over-year 🗓️ comparison of attendance:
  • ETHDenver 2018 drew in 3,000 people (ETH price was US$600, post-ICO mania)
  • ETHDenver 2019 had 4,500 attendees (ETH was worth US$100, deep bear market)
  • ETHDenver 2020 clocked 6,000 people (ETH was US$300, right before the March COVID-19 crash)
  • ETHDenver 2022 had a record 12,000+ people attend (ETH was US$3,000)
It’s important for us to attend conferences like ETHDenver to show support for the wider community and scout out new opportunities. 🤖 It also allows us to keep an eye on Ethereum 2.0 developments while collaborating with some of the brightest and most talented innovators in the space. 👩‍💻
Our goal is to continue delivering value to our shareholders by exposing them to once-in-a-generation technology that only exists in the Ethereum ecosystem. This is the place where infrastructure is being built 🔧 and you can see it up close. In fact, the Ethereum Foundation, which works to improve underlying infrastructure of the Ethereum blockchain, announced a breakthrough at this year’s event that will help make the network faster and more affordable. 🏆
ETHC Highlight Reel 🥳 🎬
ETHDenver 2022
ETHDenver 2022
We wanted share the full ETHDenver experience so we made a highlight reel of our adventure. Be sure to check it out! 🎥
Dozens of panels took place throughout the week on a range of subjects from investing to breaking down decentralized autonomous organizations (DAOs) to the future of governance. Even former United States presidential candidate Andrew Yang made a surprise appearance! 😮
It was hard to narrow down our favourite moments of this year’s conference, but here are three events that caught our attention:
1. Ethereum's Big Upgrade 💪 ⏫
Left to Right: Preston Van Loon, MacKenzie Sigalos, Cayman Nava, Alex Stokes
Left to Right: Preston Van Loon, MacKenzie Sigalos, Cayman Nava, Alex Stokes
Everyone’s talking about The Merge, but when is it happening and what can we expect? 🤷
Those working on Ethereum took to the main stage to share a progress update and fill in the gaps. Here are a couple important things to note 📝 from the conversation:
Be patient
The panelists made it abundantly clear The Merge should not be rushed. Ethereum protocol developer Preston Van Loon emphasized the upgrade will happen “when the network is ready” and that research takes time. ⌛
Preston Van Loon, Co-founder, Prysmatic Labs
Preston Van Loon, Co-founder, Prysmatic Labs
Developers are consistently using the proof-of-stake (PoS) consensus on Ethereum test networks (called testnets) where they can address issues and bugs 🐛 before launching on Ethereum’s mainnet. 🚀
“Many times over the course of developing this software, we’ve had to almost start over from scratch… We have written our whole code base at least three times,” said Preston.
This is ultimately a good thing. People sometimes want cheap and fast solutions, but that’s where vulnerabilities lie and mistakes happen. Ethereum has more than a US$300-billion market cap 👀 💰 and there’s too much at risk to simply rush the process, which is why core developers are taking time to pinpoint flaws in the code before the full transition.
Crypto 101: As a reminder, Proof-of-work (PoW) is the process that blockchains like Ethereum currently use to validate (or approve) transactions. It requires heavy computational power and validators (also called miners) who compete worldwide to solve cryptographic algorithms and are rewarded in new tokens for doing so. This is not only energy-intensive, but miners don’t have the same skin in the game as proof-of-stake validators do. That’s because they aren’t required to hold tokens to approve transactions, they just need access to specialized and expensive computer equipment that is running 24-7. 🖥️ 🕓
Proof-of-stake (PoS) uses virtually no energy compared to PoW and allows token holders to validate transactions if they stake (lock up) their assets. By doing so, they’re also rewarded in new tokens (what we sometimes refer to as “staking rewards”). As of right now, token holders need at least 32 ETH to become an active validator, but there are staking pools that allow people to combine their ETH to achieve validator status and share the rewards 💰. Some view this as a more decentralized way to approve transactions.
Check out our blog that we published last year on PoW vs. PoS.
Bottom line: The transition to PoS will not result in much change for the end user, but if you look under the hood it becomes evident this upgrade sets the stage for all future developments. 💡
Monetary Benefits from The Merge
One of the pain points in the current PoW model is that miners are over-compensated for validating. The Merge will result in reduced issuance of Ether (similar to bitcoin halving) so the token becomes a deflationary asset.
How does this happen?
In PoS, some of the transaction fees are burned 🔥 to balance out the new supply of Ether that is rewarded to the validators (token holders). We should also have a better sense of fixed supply of Ether post-upgrade.
Staking 101 🥩
Brian Mosoff, CEO of Ether Capital, on Bloomberg Quicktake (Feb 17th)
Brian Mosoff, CEO of Ether Capital, on Bloomberg Quicktake (Feb 17th)
ICYMI we recently spoke with Bloomberg Quicktake 📺 and MoneySense 🗞️ about the upside of staking and how individual investors can earn rewards by participating in this new-ish form of validation.
For those who might not be familiar with PoS, both interviews provide a good snapshot of how the process works and you’ll understand why we’re staking so much of our Ether supply! 😜
OK, back to ETHDenver highlights…
2. Investing in Web3 📈
Left to Right: Sutian Dong, Jake Bruckman, Kelly LeValley Hunt, Lucas Matney
Left to Right: Sutian Dong, Jake Bruckman, Kelly LeValley Hunt, Lucas Matney
We’re willing to bet investors and venture capitalists have a strategy before they put millions of dollars behind the next big idea. 💸
Lucas Matney, Senior Editor at TechCrunch, moderated a panel 🎤 during ETHDenver with investors about what innovations excite them the most. Here are three takeaways:
Diversity is key
Sutian Dong, Co-founder of Global Women in VC, said diversity plays an important role when it comes to investing in tech start-ups. “What we’re looking for are non-consensus, non-obvious ideas started by diverse individuals who see the world in a way no one else does,” she said. 🌎
Be flexible
Flexibility is also something that investors need to keep in mind if they’re interested in Web3 projects — both on the technology side, but also when it comes to deal flow. 💵 “If you’re not flexible, then you’re probably in the wrong space,” said Kelly LeValley Hunt, Founder and CEO of Mint Gold Dust. She also emphasized the importance of understanding the technology you’re investing in and believing in its vision so you can sell it.
Think ahead 🔮
Jake Bruckman, Founder and CEO of CoinFund, said his blockchain investment firm looks for new technology that is both trend- and thesis-driven. “Investors need to be able to predict which projects are going to catch on,” he said. CoinFund is the same company that was an early investor in the NFT space — so they must know what to watch out for, right? 😉
3. Steps to a Digital State
Vitalik Buterin, Co-founder of Ethereum
Vitalik Buterin, Co-founder of Ethereum
It was a full house of crypto enthusiasts who were laser-focused on Vitalik Buterin’s talk about how different organizations can work together to create a more open and democratic society. 🕊️ 🌎 He emphasized it’s not important to focus on who does what, but rather the end goal.
“Don’t think about it in terms of what can this specific institution do, think about it in terms of what problem is being solved and what different groups of people can work together to actually do it,” he said.
For example, American states can focus on creating room for innovation and passing laws that encourage development ✅ 💡 while other organizations build new technology in a bottom-up fashion. ⏫
Aside from cross-industry cooperation, Vitalik talked about Ethereum’s primary objectives that include scalability, transitioning to PoS, privacy assurance and of course — cheaper transactions, which “will be [the case] again!” he said to an applauding audience. 👏 💯 #WAGMI
There are many industry developments to look forward to other the next several months, the biggest one being The Merge that is just around the corner. This is a big transition that is worth watching out for and will prove to be watershed moment for the entire industry.
EthCap in the Spotlight 🔦
Want to know more about our business strategy and the unique investment opportunity we provide to our shareholders?
Don’t miss our panel today at 12:00pm ET with the NEO Exchange! 🚀
We’ll touch on the latest developments in the sector and fill you in on why we’re focused on being a net accumulator of Ether. 💰
Click here 👈 to sign up!
Newsworthy Links & Highlights
Anton Bukov, co-founder of 1inch Network, believes Ethereum will likely become the primary settlement layer for decentralized finance (DeFi). He also explained how Ethereum can address issues around scalability and potentially dethrone bitcoin as the most valuable cryptocurrency. 👑
One of JPMorgan’s top blockchain executives is leaving the firm. Christine Moy, global head of JPMorgan’s blockchain product Liink, is pursuing a new opportunity. It’s a bit of a mystery as to where she’s going, but she did take to LinkedIn to share the news with her network. Some also believe that her “WGMI” sign-off ✌️ (an acronym that stands for “we’re gonna make it” and is often used by crypto enthusiasts) is a hint that she’ll surface somewhere in the industry. We’ll be watching! 👀
Speaking of jumping ship, blockchains like Polygon and Circle are poaching top talent from Big Tech including Apple, Google and Amazon. It seems workers can’t resist the lucrative compensation packages and the industry’s rapid growth, according to experts. Who can blame them? 🤷
Have Questions About Crypto? 🧐
The industry is quickly evolving and there’s a lot of information to keep up with. That’s why we want to help! 🦸
Email us your questions and we’ll respond to as many as we can. While we can’t provide investment advice, we do want to steer you in the right direction so you can be informed.
Thank you for subscribing to our weekly newsletter! We’d love to hear your feedback so please don’t hesitate to reach out. 😎 🚀
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