, 10 tweets, 3 min read Read on Twitter
I want to connect some dots for you real quick on Ethereum synthetics and what that means for the value of ETH


1/ Synthetics in traditional finance are really, really, really big

Scroll to the bottom of this visualization

2/ Synthetics simulate financial positions

DAI is an example of a synthetic in crypto. It simulates USD price but is actually a debt note for ETH
3/ On Ethereum you can create synthetics for all sorts of assets

Each represented by a token

I made a synthetic for TESLA this morning in a UMA testnet. Owning it means owning price exposure to TESLA stock

You could also do: gold, oil, t-bills

All you need is a price oracle
4/ Synthetic issuance as easy as opening a youtube channel

This means a kid in Thailand gets the ability to buy TESLA upside

All she needs to an internet connection

No brokerage
No bank

Just an Ethereum address

Oh, and she can create her own synthetic too. And sell it
5/ If synthetics are massive in legacy finance, might they someday be even bigger in a world where their access is democratized?


Tens of trillions?

6/ Here's the thing

For the synthetics to be trustless and not dependent on a bank they need to be backed by trustless collateral

If my TESLA token is backed by USDC it can be thwarted by Coinbase

But if my TESLA is backed by ETH or DAI? It can't be stopped. It's bankless
7/ ETH is the only trustless value store on Ethereum

Just ETH

What about DAI? That's stabilized ETH

So in order for trustless synthetics to grow the value of ETH must grow. By a lot

And if the demand for trustless synthetics grows then the value of ETH will grow. By a lot
8/ This makes trustless synthetics a massive bull case for ETH

And no one is talking about it

The market is still valuing ETH as a utility, but the people paying attention know...

ETH is money
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