Tom Dunleavy is Head of Venture at Varys Capital.

In this episode, Tom walks us through his valuation framework for ETH. He offers a mental model where Ethereum is the vault filled with stablecoins, RWAs, and DeFi activity secured by it. But ETH is the lock--and the bigger the vault gets, the more valuable the lock has to be to protect it. Based on Ethereum's current onchain activity, Tom gets us to a fair value for ETH that's much higher than the price today. Furthermore, we discuss what happens to the price of ETH when Ethereum grows to $750B-$1T onchain by 2030.

Tom insists the vault won't stop growing thanks to demand for stablecoins and RWAs—and that ETH, the lock, is simply due for a repricing.

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⏱️ TIMESTAMPS

0:00 - Intro
2:51 - Tom’s role investing at Varys Capital
3:32 - How Tom became convinced DCF was the wrong way to value ETH
6:16 - Is Ethereum winning?
11:20 - Fees are friction, and hence not how we should value ETH
15:51 - Can Ethereum have its cake and eat it too, when it comes to capturing fees?
19:24 - If Ethereum is the vault, ETH is the lock
23:37 - Why stablecoin numbers are bullish against all odds this bear market
26:43 - Ethereum must succeed, or crypto as an asset class fails
28:39 - Linux and DTCC: Why the comparison to Ethereum is both useful and wrong
32:34 - The importance of Ethereum as trustware, producing blocks for over 10 years
35:19 - Underestimating the impact of Ethereum scaling L1
39:20 - If an issuer freezes stablecoins, it doesn’t break reliance on Ethereum security
41:50 - Tom’s valuation framework is for ETH, not for DeFi tokens
44:54 - $20,000 to $50,000 per ETH if onchain liquidity hits $750B–$1T
47:12 - How Tom gets to a fair market value today of $6,900 per ETH
50:03 - Was ETH overvalued in 2021 based on this same model?
52:38 - The 2030 base case ($55k) vs bull case ($138K)
53:36 - Closing

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🔗 GUEST LINKS

► Tom Dunleavy on X: https://x.com/dunleavy89
► Tom's Ethereum article on X: https://x.com/dunleavy89/status/2059717202392359118?s=20

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DISCLAIMER: Nothing said on The Edge Podcast is a recommendation to buy or sell tokens or securities. This content is for educational and entertainment purposes only. Nothing shared here is financial advice. Any views expressed by hosts or guests on the show are solely their opinions. Always do your own research. DeFi Dad, Nomatic, and guests may have positions in the assets or other matters discussed in this podcast. DeFi Dad and Nomatic hold ETH.