Got Ethereum? Consider What’s at Stake.

Ethereum investors stand to be handsomely rewarded. [Altucher Confidential] June 29, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Ethereum has the strongest security of any proof-of-stake blockchain. But, consider what’s happening now. [Hero_Image] Got Ethereum? Consider What’s at Stake. By: James Altucher “Godfather Of AI” Reveals Stunning Prediction [James Altucher]( He’s a 35-year AI veteran who has worked closely on AI technology for decades… - In 1988, the National Science Foundation funded him to build an AI chess program. - He’s written and published academic papers on AI. - And he’s used AI to trade stocks as early as 2001. [But today, he’s stepping forward with a critical prediction that he says every investor needs to hear.]( Whatever you do, I’m urging you to not invest a single dime into AI technology until you see this man’s warning. [Click here for details.]( [James Altucher] JAMES ALTUCHER Dear Reader, In the past few weeks, crypto has roared back to life following news that the world's largest asset manager, Blackrock, is attempting to launch a Bitcoin ETF. The news is welcome relief following months of painful attempts by US regulators to cut-off crypto at the knees. And while the announcement from Blackrock is positive, the story has overshadowed a much larger opportunity in crypto. One that will exponentially grow DeFi… and could even help Ethereum become more valuable than Bitcoin. To understand this story, it's important to understand the recent history of Ethereum and its shift to proof-of-stake. Understanding Staking A quick refresher: Earlier this year, Ethereum switched the underlying technology powering its blockchain from proof-of-work to proof-of-stake. At its core, these two technologies both guarantee that no one person controls a blockchain and that blockchains cannot be tampered with or shut down by any government. Proof-of-stake uses a fancy deposit mechanism to ensure that blockchains are tamper-proof. Transactions are added to the blockchain by “validators” who run the servers that operate the blockchain. Anyone can become a validator provided they have the right equipment and enough money to meet the deposit requirements. Currently, the deposit or “stake” requirement is 32 Ethereum or about $64,000 USD at current prices. The purpose of the stake is to prevent validators from breaking the rules. If a validator tries to break the rules - for example, by reversing a transaction - the validator risks having a portion of their stake confiscated or “slashed.” However, if the validator plays by the rules, they stand to earn interest for their work. Better still, they can also accept deposits from others to increase their stake, and thereby earn a commission on funds staked by others. Since validators can make good money by charging a commission on funds staked from others, it's in their best interest to behave honestly. Apart from losing their own money, validators are also responsible for the money that is deposited with them. If they start having their stake slashed, stakers will withdraw funds and the validators will no longer be able to earn a commission from them. Now that we covered the basics of staking, it's time to discuss some advanced concepts. Understanding Liquid Staking We’ve previously written about “liquid staking.” A quick refresher: In Ethereum staking, stakers are required to wait a “cool down” period to withdraw their funds. This is a security mechanism that prevents dishonest validators from withdrawing their funds before they are caught to avoid getting slashed. In order to overcome this, some bright engineers came up with the idea of liquid staking. Liquid staking allows anyone to deposit funds with a liquid staking tool, like Lido, and receive an IOU from Lido. Lido takes the funds it receives from users, stakes it with Ethereum validators, and issues an IOU to the customer. Customers can use the IOU to redeem their deposit from Lido at any time, or they can sell the IOU to someone else. In effect, liquid staking allows users to earn yield from staking on Ethereum but also be able to sell or deposit their Lido IOU (called stETH) into another DeFi tool to earn even more yield. [CHART] Could Inflation Hit 20%+ In 2023? [Click here to learn more]( Take a close look at this scary chart pictured here… What you see is the money supply in America… And as you can see, the number of dollars in circulation has exploded in the last few years. In fact, more than 80% of all dollars to ever exist have been printed since just 2020 alone! Which is why some say inflation could soon explode even higher than it is now, to 20% or more. And if you’re at or near retirement age you must take action now to protect yourself… otherwise you risk losing everything. [Simply click here now to see how to survive America’s deadly inflation crisis](. Liquid Staking 2.0: The Launch of Eigen Layer At this point, you’re probably wondering how (and when) Ethereum will be worth more than Bitcoin. Now that you have the background on staking and liquid staking, I’d like to explain the next generation of staking, or what some people are calling “Blockchain as a Service (BaaS).” In addition to keeping validators honest, staking also prevents governments or very wealthy individuals from tampering with the blockchain. In order to tamper with the blockchain, a bad actor would need to buy up enough Ethereum to control 51% of the staked Ethereum on the blockchain (approximately $18.4bn USD at current prices). Even then, the attack would probably not be successful and the attacker would most likely have $18.4bn USD slashed. For this reason, Ethereum is one of the strongest and most tamper-resistant proof-of-stake blockchains. The more valuable a cryptocurrency becomes, the harder it is to attack a proof-of-stake blockchain. However, this creates a challenge for new blockchain services. New proof-of-stake blockchain services are susceptible to attack because it does not cost very much to successfully attack them. In the past few years, we’ve seen several examples of early-stage blockchains being attacked by bad actors that were able to purchase 51% of the tokens. This is where the Eigen Layer comes in. Remember how users could deposit their Ethereum and get IOUs (stETH) from Lido? Well, Eigen Layer allows users to take those IOUs and deposit them as stake in another blockchain service apart from Ethereum. The purpose of this design is to allow users to earn a stable return from staking their Ethereum on the Ethereum blockchain but also earn additional yield by staking their Lido IOUs on a new blockchain service. If your head is spinning at this point, I don’t blame you. The idea of staking Ethereum in Lido, getting an IOU, and turning around to stake that IOU in Eigen Layer feels a bit like double dipping. And yes, this strategy will increase investors' risk of getting slashed (either by the Ethereum blockchain or by the second blockchain). However, if the blockchain services using Eigen Layer are well designed, the chances of getting slashed will be very low. The team behind Eigen Layer is treading carefully to avoid exposing their users to a high risk of slashing. In exchange, Ethereum investors stand to be handsomely rewarded. Eigen Layer allows new blockchain services to achieve a level of security on par with Ethereum and allow Ethereum investors to earn even more yield. This capability already has DeFi experts raving about Eigen Layer and what it means for the future of Ethereum prices and the DeFi ecosystem. When Eigen Layer launched in beta earlier this month, it very quickly reached maximum capacity and is no longer accepting new deposits. However, I expect that over the next few months, Eigen Layer will expand access to more users as it carefully rolls out new features. The development and use of Eigen Layer stands to make Ethereum far more valuable than it is today. Ethereum already has the strongest security of any proof-of-stake blockchain. Eigen Layer will make this feature available to other blockchain services and exponentially increase demand - and security - of Ethereum in the process. Sincerely, [James Altucher] James Altucher Editor, Altucher Confidential New “WiFi Crypto” Token is Going NUTS! Only a handful of crypto investors know about this… But there’s a tiny, affordable device… That’s paid investors real crypto – every day, with zero work… Just for having a working WiFi connection! It sounds crazy, but it’s true… And [this 3:28 video]( explains everything. [Click here to view it NOW](. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Altucher Confidential e-mail subscription and associated external offers sent from Altucher Confidential, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@altucherconfidential.com. This address is for feedback only. 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