Ethereum merge ‘very smooth overall success,’ Galois Capital co-founder says
sticking with crypto ethereum has completed the merge moving the world’s second largest blockchain network from a proof of work to a proof of stake but how is this marriage fair for the ethereum user base thus far let’s bring in Galway Capital co-founder Kevin Zhou and Yahoo finance’s David Hollerith.
Um great for great to see you here today Kevin I want to ask you about uh the merge and did it go basically according to plan to you uh according to you and I got to tell you we’re all still here and we didn’t see any major disruptions in price so uh has it been successful so far um yeah I think you know overall uh.
Depending on what perspective you’re looking at if you’re looking at it from the perspective of technically did things go smoothly uh that would be the case you know pretty much the merge was a non-event which is a good thing uh no catastrophic bugs uh not even that many minor bugs uh overall a lot of validation uh from the validators I.
Think you know for most um uh blocks and Slots uh over 95 98 I think only uh one block in the first few epochs which is a series of blocks uh was missed um so you know very I think standard uh very smooth overall a success I think from a Market’s perspective from a price perspective on the other hand uh not quite a success and you know very much.
Very soon after the merge uh price started dropping off uh pretty heavily so this was definitely much more of a sell the news event uh than than otherwise so you know depending on who you ask I think developers and Traders might tell you a different answer there and uh Kevin you know since the merges happened to we have we’ve had this uh.
Situation where you know crypto mining has been eliminated and crypto ethereum miners are have have forked uh the ethereum protocol to sort of run a proof of work postmer or pre-merge version of the blockchain I was just curious you know from an investor standpoint uh there’s been a new coin created and can you just tell us more about this I mean.
It’s kind of confusing uh yeah so I think the idea is that once uh ethereum is switching off of proof of work um you know all of these miners are now out of the job and uh they really didn’t want to go quietly into the night so they decided that they were going to make their own Fork where they would.
Continue to use proof of work uh to mine their own chain uh now I think in terms of the ratio of the two uh coins the new proof of State coin versus the old uh proof of work you know with some modifications uh you know the ratio is something like you know one percent to you know 100 uh the proof of War coin being smaller.
Um you know and it fluctuates uh quite a bit um so I think overall most of the value has migrated over to the upgraded proof of stake chain but the miners are still fighting uh for some market share their approach before and Kevin how do you make sense of sort of what this new coin is in terms of uh.
For investors I mean it is slightly confusing I mean it seems like it might not have any actual economic value to it um yeah it’s you know trading at all 11 after having sold off a lot so since it’s been issued so you know how are you thinking about something like this yeah you know for us we’re really just thinking about it from a trading.
Perspective so you know the sort of short-term and long-term uh long term I think is very speculative I think it just comes down to uh what people want at the end of the day uh whether they want you know a chain where they have all the apps all the developers or a chain where you know you have this proof of work mining uh you know maybe there’s.
Some value there for some types of folks I think in the short term um that’s that’s I think much different I think for that it’s more about structurally what are the imbalances in supply and demand um you know a lot of what’s going on in the proof of work chain is that you have all of these duplicated assets some of.
Which have no value some which might have some value and people are shuffling those around in the first few blocks uh mostly dumping them for ethereum proof of work and then dumping ethereum proof of work on exchanges so there’s a lot of Supply to chew through uh in the beginning which is why we’re seeing the price go down.
Um and then you know at some point maybe it finds the bottom maybe some people buy it up maybe it just keeps trailing off the zero really hard to say but you know I think just overall really interesting to watch and I think it’s it’s it’ll probably resolve over the next uh two weeks or so and then I think from there um you know we’ll see what.
Kind of new developments happening from there well I I want I appreci I appreciate all the talk about the short or term gyrations here I want to take a bigger picture of you what’s your assessment of the state of crypto right now we’re still kind of mired in this crypto winner where we have uh the new ethereum or I guess ethereum uh just.
Hovering around fifteen hundred dollars Bitcoin around twenty thousand we’ve seen these numbers for some time trying to get off the ground but we’ve also seen the continued institutionalization that was a theme last year when we were at record highs by Wall Street now where are we yeah you know I think this whole idea.
About you know these institutions coming um a lot of that just happens in the Cycles right you know as the price goes up it becomes more meaningful for these larger and larger institutions uh to put Capital to work you know obviously you know some of these the largest of these institutions like you know Sovereign wealth funds these giant endowments for.
Them you know encrypt those early days the market cap was just too small even if they thought it was a good investment uh it still didn’t make sense for them because even if they doubled their money on maybe like 50 Mill 100 Mil uh it doesn’t really move the needle for them if they’re running like you know 10 Bill 100 bill so um so I think overall a lot.
Of this kind of institutional adoption you’re what we’re seeing you know over the past I think 11 years is that you know these smaller institutions first adopted which then kind of makes the market cap big enough for these medium-sized institutions to adopt it which then makes the market cap big enough for the largest institutions uh.
To adopt so I think you know what we’re starting to see that play out uh but you know obviously this is very slow and it takes that makes money years for that to happen yes it does and we’re just sitting here patiently hodling aren’t we thank you very much for stopping by here galwa Capital founder Uh Kevin Zoe who finances David Hollerith.