Echoing Michael Saylor’s Bitcoin strategy, Joseph Lubin asserts that Ethereum treasury initiatives can yield significant returns on investments compared to their Bitcoin equivalents.
In an exclusive interview with Cointelegraph at Token2049 in Singapore, the Ethereum co-founder elaborated on his belief that Ether (ETH) digital asset treasuries (DATs) offer better prospects than the Bitcoin treasury approach made popular by Saylor.
“I prefer something that might have more impact. It’s certainly as robust as Bitcoin, and I would argue even more robust due to its functionality and the intrinsic demand for transaction and storage fees,” said Lubin.
The Ethereum co-founder has been ardently promoting ETH DATs since he took the helm at the ETH-based treasury firm, SharpLink Gaming.
The Nasdaq-listed iGaming company has acquired over $2 billion in Ether since it implemented a treasury approach in August.
Inspired by Michael Saylor
Lubin acknowledged that his drive to lead an ETH treasury firm was influenced by Saylor and his financial strategies, which utilize Bitcoin as a reserve asset.
“I had the opportunity to dine with him in December and heard his reasoning for that strategy. It was fundamentally about seeking better treasury capital assets for his firm,” Lubin shared.
“I spoke with my colleagues who immediately recognized that Ether would serve as a superior treasury asset since it generates productive yield.”
Lubin exhibited optimism regarding Ethereum’s mid-term outlook. He predicted the ecosystem reaching its “broadband moment” in 2025, with a protocol that is both horizontally and vertically scalable, necessitating abundant, inexpensive block space.
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He indicated that Ethereum had previously scaled too quickly over the past 18 months, resulting in a “glut of block space” without enough builders, applications, or transactions to utilize it effectively.
“I genuinely believed there were lulls in our ecosystem. That stemmed from price issues due to surplus Ether and excessive inexpensive block space,” Lubin explained.
The proposed fix? Initiate a movement of ETH DATs that actively acquire the underlying protocol token and engage in staking and investing Ether.
“We believed we could invigorate the Ethereum ecosystem. And that has been quite successful. We have several companies participating and distinguishing ourselves in many exciting ways,” he noted.
Supply-demand dynamics to boost Ether
The Ethereum DAT landscape is rapidly evolving, though it is primarily led by two key entities: Lubin’s SharpLink and Tom Lee’s BitMine.
BitMine stands as the major player, propelled by Lee’s bullish predictions for Ether, having accumulated 2.65 million ETH as of Wednesday. This holding is valued at $11 billion, significantly surpassing SharpLink’s 839,636 ETH worth $3.69 billion.
Related: SharpLink Ether holdings near $1B in unrealized gains as ETH surges
Lubin informed Cointelegraph that he initially expected a quick accumulation of ETH, a perspective that has shifted since Lee announced his goal to acquire 5% of Ether’s overall monetary supply.
“We hadn’t planned a cap, but we realized we couldn’t amass too much ETH to avoid backlash from the ecosystem.”
Lubin’s long-term objective is to increase the concentration of Ether per fully diluted share while ensuring the equity price remains stable. Following that, SharpLink aims to keep generating yield on its staked Ether.
Lubin envisions a future where SharpLink borrows against its ETH, invests in Ethereum-focused companies, and stakes in supporting protocols.
“The true opportunity is to become the Berkshire Hathaway of the next global economy—a more decentralized global economy.”
Weighing up the risks
The DAT movement is poised to become a notable narrative in 2025. However, skeptics remain wary of the systemic risks that treasury firms may face by incurring substantial debt to acquire protocol tokens.
Lubin downplayed any suggestions of a catastrophic failure linked to DATs, cautioning instead against businesses becoming over-leveraged.
“The greatest risk is not pursuing this innovative approach because it represents a significant new paradigm.”
Lubin expects ETH prices to rise as supply-demand factors become more favorable, fueled by ETH DAT purchases.
“The financial sector is moving quickly into our ecosystem,” he mentioned. “Other businesses are joining as well. This is our broadband moment. There’s serious focus on our developments. We won’t overextend ourselves.”
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