Ethereum, Institutions & the Quantum Threat in 2026: Key Insights from The On Chain Podcast Ep. 2

Following 30,000 views across platforms on our debut episode, Episode 2 of The On Chain Podcast goes deep on Ethereum. 

Tax On Chain & Mortgage On Chain co-founders Rafael Franco and Oliver Woodbridge sit down with Anthony Sassano, an independent Ethereum educator, angel investor, and founder of The Daily Gwei. Anthony has spent a decade inside the Ethereum ecosystem, producing over 800 daily podcast episodes, advising early-stage projects, and building one of the most respected Ethereum communities in the world. 

Whether you hold ETH, are trying to understand why this cycle has felt different, or want to know what the quantum computing threat actually means for crypto, this episode has something for you. 

🎙️ Listen to the Full Episode Here: 

How Anthony Went From Losing Money on Bitcoin to a Decade of Ethereum 

Rafael opened by asking Anthony to take them back to how he actually got into crypto. The answer was more honest than most guests give. 

Anthony first bought Bitcoin in 2013 at 21 with very little money, tried to trade it, and lost. He stepped away. When he came back in 2017, Ethereum had already been live for almost two years, and it immediately grabbed him in a way Bitcoin never had. 

“People know Bitcoin as this thing you store your value in, you buy it, that’s all you kind of really do. Whereas with Ethereum it’s completely different. You can build whatever you want on it.” ⏱ 3.25 – Anthony Sassano, The Daily Gwei 

From there he went all in. Not just financially, but with his time. He started educating publicly from late 2018, launched The Daily Gwei in mid-2020, and produced daily 30-minute solo episodes for years, no script, no co-host, just Anthony talking about what was happening in Ethereum every single day. 

“There were months at a time where I would spend every waking hour on Ethereum. I wouldn’t do anything else with my life.” ⏱ 17:15– Anthony Sassano, The Daily Gwei 

That eventually caught up with him. Burnout hit hard around 18 months ago, and he shifted to weekly episodes. But the timing worked. The ecosystem itself had matured, and a weekly cadence now captures what matters without the daily grind. 

Oliver pushed on this: was the ecosystem actually less interesting now, or just different? Anthony’s answer was sharp. There is still plenty happening at the core protocol level. What has dried up is the app layer, because bear markets kill VC funding, new user growth slows, and builders do not launch into a quiet market. The institutions filling that gap move much slower than crypto natives. What took a crypto-native community a day to adopt takes a TradFi institution six months. 

 

“Most of Them Are Zombie Chains” 

Oliver asked Anthony directly: with so many L1 blockchains out there, what is it about Ethereum’s ethos that actually resonates? 

Anthony did not hedge. 

“If you look at the whole landscape of every chain within crypto, pretty much all of them have gone nowhere really. The only ecosystems that match the original ethos of kind of what this industry was founded upon is Bitcoin and Ethereum.” ⏱ 10:40 – Anthony Sassano, The Daily Gwei 

His framework: a blockchain exists to be decentralised, censorship resistant, and secure. Not to be the fastest database. The moment you optimise purely for speed, you compromise the property that makes a blockchain worth building on in the first place. 

Bitcoin does one thing. You hold it. Ethereum does everything Bitcoin does, plus everything else. Solana has found real users but has made decentralisation trade-offs to do it. Everything else? 

“I call them zombie chains, run by zombie developers who are just going through the motions, collecting a paycheck. They don’t even care anymore.” ⏱ 51:56 – Anthony Sassano, The Daily Gwei 

His view is that most of the remaining L1s were created to extract money from investors, not to solve a real problem. The ongoing development theatre exists primarily to avoid legal exposure. Not to build anything. 

 

The Ethereum Foundation Mandate and Why the Critics Are Wrong 

Oliver raised the EF’s recently published CROPS mandate, Censorship Resistance, Open Source, Permissionless, Secure, and the criticism it received from the community. Rafael noted the criticism the EF often receives – why is the EF not doing more? Where is the marketing push? Where is the institutional outreach? 

Anthony’s response was to reframe what the EF actually is. 

It is a non-profit. The only money it will ever have is the ETH allocated at the original ICO, now worth roughly one billion dollars. That is it. It cannot raise more. It cannot print ETH. That pool has to fund the world’s best protocol researchers for potentially decades. 

Spend it on marketing and you spend less on development, post-quantum research – things that actually matter. That trade-off, Anthony argued, is straightforwardly wrong. 

“I would much rather them focus on what they’re already good at than try and pivot to something else and waste money they don’t have to waste.” ⏱ 45:51 – Anthony Sassano, The Daily Gwei 

In reference to the criticism the Ethereum Foundation receives about selling its ETH – Anthony also pointed out something most critics miss: the EF publicly announces ETH sales before they happen and publishes transparency reports on exactly how funds are spent. He challenged anyone to name another major L1 foundation that does anything close to this. The reality is most other L1 foundations and founders will dump their tokens on retail to allow their VC backers to quietly cash out. 

The criticism directed at the EF for selling ETH to fund operations, he argued, should instead be directed at every other L1 foundation that has quietly sold billions in tokens with zero transparency, and spent most of it enriching founders. 

 

Etherealize: The Piece the EF Was Never Built to Be 

So if the EF is not doing institutional BD, who is? 

Rafael brought up Etherealize – an institution-focused advocacy and development group that bridges traditional finance to Ethereum – and Anthony explained how the structure actually works. Etherealize is an independent entity, seeded with EF support but running its own funding, its own team, and its own mandate. Their job is to take Ethereum to Wall Street. Sit across the table from TradFi institutions, explain the architecture, make the case for ETH as an asset, and show what building on Ethereum actually looks like in practice. 

Institutions move slowly. There are no quick wins. But the results are starting to show: Blackrock’s BUIDL Fund, the ETH ETFs, ETH treasury companies, Arbitrum in conversations with Robinhood. 

Anthony’s point was that this distributed approach is more resilient than any single entity trying to do everything. The EF handles the protocol. Etherealize handles the pitch. L2 teams handle enterprise relationships directly. None of them need the others to carry their load. 

 

Bitmine, SharpLink, and What It Actually Means to Put ETH to Work 

Rafael raised the rise of ETH Digital Asset Treasuries, specifically Bitmine and SharpLink Gaming, and what they are actually doing with their ETH holdings. This is where the conversation got genuinely interesting. 

Unlike Bitcoin treasury companies (think Michael Saylor and Strategy) these companies are not just buying ETH and sitting on it. They are staking it, earning yield, acquiring staking infrastructure businesses, and building financial products on top of it. Bitmine acquired Pier Two, an Australian staking provider, and launched their MAVAN validator network. SharpLink, led by Ethereum co-founder Joe Lubin, is staking and integrating with DeFi protocols. BlackRock’s staked ETH ETF now lets institutional investors earn staking yield inside a traditional investment wrapper. These are multi billion dollar corporations building on top of Ethereum and contributing to the network. 

“That’s the whole point of Ethereum, right? You do stuff on it. You don’t just hold it like with Bitcoin. You put it to work.” ⏱ 1:00:42 – Anthony Sassano, The Daily Gwei 

Rafael noted that none of this could be possible if Ethereum was still under proof of work. The Merge in September 2022 made productive ETH ownership possible at institutional scale. Anthony noted the irony of watching so many people publicly declare the Merge would never happen, right up until the day before it did, and then simply move their scepticism to the next thing. 

CAN WE INSERT A QUOTE FROM RAF HERE? 

Oliver queried whether institutional accumulation of ETH creates centralisation risk: Anthony was direct. Simply holding ETH gives you no power over the network. To meaningfully attack Ethereum you would need 33% of staked ETH at a bare minimum, which is roughly 10 million ETH at current levels. And even then, the only realistic attack is censoring or delaying transactions, which triggers an inactivity leak that slowly drains your own stake. Real attacks require over 50%, at which point the ETH price collapses and you have destroyed your own position. The economics make it self-defeating. 

 

The Quantum Threat: This Is Not a 2040 Problem 

Anthony brought up the quantum threat unprompted, and it stopped the conversation. 

A Google research paper co-authored by Ethereum Foundation researcher Justin Drake suggests quantum computing capable of breaking existing cryptographic standards could materialise as early as 2030. Four years away. It would not just break crypto. It would break large parts of traditional finance as well. 

“We could see quantum materialise by 2030. That breaks everything in crypto.” ⏱ 48:34 – Anthony Sassano, The Daily Gwei 

Ethereum has had a post-quantum roadmap in active development for years. The EF research team, led by people like Justin Drake, has been working on this well before it became a mainstream conversation. The layer 1 architecture was built around security and decentralisation, meaning the post-quantum transition is technically feasible without collapsing the network. 

Solana’s own internal testing found that implementing post-quantum signatures collapses their network throughput by approximately 90%. That is a direct consequence of optimising for speed over decentralisation at layer 1. To achieve quantum security, Solana would effectively need to rebuild from the ground up. 

Bitcoin’s situation is more complicated still. Some early wallets, including Satoshi’s coins, may be fundamentally unprotectable regardless of what changes Bitcoin eventually makes. The community remains divided on whether the threat is even real. Anthony noted the darkly funny scenario of developers needing to essentially steal Satoshi’s coins in a “white hat rescue operation” to protect them before a malicious actor exploits the vulnerability. And then having no way to return them because nobody knows if Satoshi is even still alive. 

 

Stablecoins: Why the Decentralised Version Is Harder Than It Looks 

Rafael asked Anthony on stablecoins, and he was blunt about the reality of what people are actually holding. 

Tether and Circle both have built-in freeze functions. Either company can freeze any wallet at any time. The token holder does not hold the underlying dollars. They hold an IOU backed by funds in a bank account that these companies control, with no FDIC-style protection. 

“It is actually worse than holding US dollars in a bank account because at least when you hold US dollars you have FDIC insurance. You don’t have that for these things.” ⏱ 25:26 – Anthony Sassano, The Daily Gwei 

Stablecoins service a purpose and are great for transferring value, but be weary of holding them long term. 

On whether a genuinely decentralised stablecoin is possible: Anthony thinks the total addressable market for it is small compared to a centralised one, and most projects that have tried to scale eventually compromise by adding centralised collateral. Maker DAO is the clearest example. They started with ETH as collateral, realised they could not scale on that alone, started adding centralised assets like USDC, and in doing so undermined the whole premise. 

Anthony agreed with Rafael’s view that if you want a decentralised store of value in crypto, the answer is not a stablecoin. It is a mature, highly liquid ETH or BTC – when they have market caps in the trillions and aren’t as susceptible to the market volatility that they experience today. Everything else, including bridged versions of these assets on other chains, involves counterparty risk most holders do not fully understand. 

 

Angel Investing: What Anthony Actually Looks For 

Oliver asked Anthony to walk through how he evaluates early-stage investments, and what separates the teams he has backed that succeeded from those that did not. 

At pre-seed and seed stage, Anthony is not investing in an idea. He is investing in a team’s ability to execute on the idea and pivot when it does not work. 

“The biggest winners I’ve had, when I went on the first call with the founders, I could tell just by their energy that they were going to succeed no matter what. They had something to prove.” ⏱ 36:00 – Anthony Sassano, The Daily Gwei 

Critical thinking is the non-negotiable. Founders who cannot challenge their own assumptions will not adapt when the market gives them feedback. The pitch deck almost does not matter at that stage. There is usually no product yet, sometimes just a proof of concept. Everything comes down to whether you believe these specific people can figure it out. 

The volume of deals has dropped sharply. Around 80 investments across a three-year bull run, now two or three per year. The capital environment has contracted, AI has pulled developers away from crypto, and public market token performance has been so poor that VCs are far less willing to fund early bets. The easy money is gone. 

Oliver asked about the investments Anthony had passed on that he regretted. His answer was illuminating: the regrets were not missed opportunities but sizing mistakes. His biggest winners were ones he had not put enough into. His biggest losses were ones he had over-allocated to based on hype at the time. 

He also addressed something Oliver pushed on directly: had he ever been offered investments that he knew would make money but had passed on for ethical reasons? 

“I probably wouldn’t be able to live with myself. These things really do get to me and bring me down.” ⏱ 29:55– Anthony Sassano, The Daily Gwei 

He had been approached multiple times with deals offering day-one token unlocks and no vesting. The only purpose of that structure is to enable a pump and dump. He calculated in hindsight what he would have made on a few of them. The numbers were significant. He passed on all of them. 

 

What Separates Investors Who Build Wealth from Those Who Get Caught Out 

To close, Rafael and Oliver asked Anthony to sum up what he consistently sees separating investors who build long-term wealth from those who repeatedly end up on the wrong side of the market. 

What the successful ones do: 

• DCA consistently, both averaging in on the way down and averaging out on the way up 

• Maintain dry powder so they can act when prices drop rather than being forced to sell 

• Build conviction based on understanding the asset, not on price action. If nothing has changed about the underlying, a price drop is not a reason to sell. 

• Get tax structure right before gains accumulate, not after 

What the ones who struggle do: 

• Chase altcoin rotations that no longer play out the way they did in previous cycles 

• Treat influencer content as research. Anthony was direct: most crypto YouTubers are either pumping assets they hold, earning referral fees, or running paid spots. They are not trying to help you. 

• Buy peak conviction at peak prices, then exit at the bottom when the price moves against them 

• Ignore tax structure until large unrealised gains have already built up, making restructuring expensive 

On the influencer point, Oliver asked Anthony to expand. His answer: doing your own research does not mean watching a few different YouTube channels. That is letting someone else do the research for you. Real research means going to primary sources, reading protocol documentation, understanding what you actually own, and applying the same diligence you would to a property purchase. 

 

Australian Crypto Tax Q&A: Ethereum, Staking, DeFi and SMSFs 

Tax On Chain is a specialist Australian crypto tax accounting firm. The answers below are general in nature and do not constitute personal financial or tax advice. Individual circumstances vary. Speak to a qualified crypto tax adviser before making decisions. 

 

Is staking ETH taxable in Australia? 

Yes. The ATO treats Ethereum staking rewards as ordinary assessable income at the time they are received, not when you sell. The value is calculated in AUD at the market price on the date of receipt. This applies whether you are staking directly as a validator, using a liquid staking protocol like Lido, or earning rewards through a centralised platform. 

When you later sell or dispose of the ETH received as staking rewards, a separate CGT event occurs. The cost base for that ETH is the AUD value at the time it was received as income. If you hold it for more than 12 months before selling, you may be entitled to the 50% CGT discount as an individual, or 33.3% as an SMSF in accumulation phase. 

The structure you stake through matters significantly. Staking rewards taxed at your personal marginal rate (up to 47%) versus a company (25%-30%) or even inside an SMSF at 15% is a meaningful difference at scale. Getting structure right before the staking income starts accumulating is something Tax On Chain works through with clients specifically. 

 

How is ETH taxed in Australia? 

Holding ETH is not a taxable event. A CGT event occurs when you sell, trade, swap, gift, or otherwise dispose of ETH. The taxable gain or loss is the difference between the sale price in AUD and your cost base (what you originally paid, including any fees). 

If you have held the ETH for more than 12 months before disposing of it, you may be entitled to the 50% CGT discount as an individual, reducing the taxable portion of the gain. The net capital gain is added to your assessable income for that financial year and taxed at your marginal rate. 

Staking rewards, DeFi yield, and any other income derived from holding ETH are treated separately as ordinary income at the time of receipt, regardless of whether you sell the underlying ETH. 

 

Are DeFi transactions taxable in Australia? 

Generally yes, and this is one of the most complex areas of Australian crypto tax. The ATO applies CGT principles broadly to crypto disposals, and many DeFi interactions constitute a disposal even when it does not feel like a traditional sale. Key examples: 

• Token swaps: Exchanging one token for another is a CGT event on the token disposed of 

• Providing liquidity: Depositing tokens into a liquidity pool in exchange for LP tokens is likely a disposal 

• Liquid staking: Exchanging ETH for a liquid staking token such as stETH is likely a CGT event 

• Looping strategies: Borrowing against an LST to buy more ETH, then staking that ETH again, involves multiple transactions each potentially triggering a CGT event 

• Bridging: Moving assets to another chain via a bridge may constitute a disposal depending on the mechanism 

• Liquidations: Being liquidated in a DeFi lending protocol is a taxable disposal 

The ATO’s guidance is limited and professional interpretation is required. The record-keeping burden is significant because most standard exchange reports do not capture on-chain DeFi activity. Tax On Chain specialises in reconciling exactly this type of portfolio. 

 

Can I hold ETH in an SMSF? 

Yes, provided the fund’s investment strategy permits crypto assets and the trustee has documented the rationale in writing. Holding ETH in an SMSF is legal and increasingly common among Australian investors with a long-term Ethereum thesis. 

The tax advantages are significant: 

• Staking rewards and other earnings are taxed at 15% during the accumulation phase, compared to up to 47% personally 

• Capital gains on ETH held for more than 12 months in accumulation phase are taxed at an effective 10% rate (15% less the 33.3% discount) 

• Assets sold in pension phase attract 0% CGT, provided the fund is fully in pension mode 

• Concessional contributions allow pre-tax dollars to build the ETH position 

With institutional players like Bitmine and SharpLink accumulating ETH for multi-decade holds and staking for yield, Australian investors with long timeframes should give serious consideration to whether an SMSF is the right structure, particularly when entering at lower price points. 

Tax On Chain are Australia’s leading crypto SMSF accountants and works with Australian investors to set up manage crypto SMSFs and manage their ongoing compliance obligations. 

 

Is liquid staking taxable in Australia? 

This is an evolving area of Australian crypto tax law. The ATO has limited  guidance on liquid staking tokens. Based on current CGT principles and professional interpretation, exchanging ETH for a liquid staking token such as stETH or rETH is likely treated as a taxable disposal, because you are giving up one asset and receiving a different one in return. 

The staking yield earned on an LST position is generally treated as ordinary assessable income at the time of receipt, similar to direct staking rewards. 

The mechanism behind how staking rewards accrue to Rocketpool’s rETH token is worth some consideration when formulating an ETH staking strategy. Unlike other liquid staking tokens like stETH, which distributes staking rewards directly to your wallet as new tokens – potentially creating a taxable income event each time rewards are received – rETH accrues its yield internally, with the token itself appreciating in value over time as rewards compound. This means holders of rETH may only trigger a taxable event upon disposal of the token, rather than on an ongoing basis as rewards are distributed. 

If you are running a looping strategy, borrowing against your LST position to acquire more ETH or more LSTs, each leg of that loop may constitute a separate CGT event. The tax complexity compounds quickly. Detailed transaction records and specialist advice are strongly recommended before implementing these strategies. 

 

What is the tax difference between holding crypto personally versus in a trust or company in Australia? 

The structure you hold crypto in determines your effective tax rate on both income and capital gains. Here is how the main options compare: 

Personal name: Capital gains, staking rewards and other DeFi yield generating activities are added to your total income for the year and are taxed at your marginal income tax rate (up to 47%), with a 50% CGT discount available on the sale of assets that have been held over 12 months.  

Discretionary trust: No tax at the trust level. The trustee distributes income and capital gains to beneficiaries, who pay tax at their individual marginal rates. With the right beneficiary structure this can result in significantly lower overall tax, and the 50% CGT discount flows through to individual beneficiaries. Companies can also act as corporate beneficiaries, enabling profits to be distributed and taxed at the lower corporate rate should distributing to individual beneficiaries not be tax effective. 

Company: Flat corporate tax rate of 25% (for active “trading” entities – e.g. crypto traders) or 30% for passive investment companies. The 50% CGT discount is not available to companies, which is a meaningful disadvantage for long-term crypto holders. 

SMSF: 15% flat tax rate on income and capital gains, with a 33.33% capital gains discount available on assets held longer than 12 months, bringing the effective tax rate down to 10% on long-term capital gains for SMSFs in accumulation phase. 0% tax rate for SMSFs in pension phase. The most tax-effective structure for long-term holders who do not need to access the funds before retirement. 

The right structure depends on your income level, investment horizon, whether you plan to stake or use DeFi, and your broader financial circumstances. Tax On Chain works with high net worth investors to work through this analysis before they accumulate positions that make restructuring expensive. 

 

When is the best time to restructure crypto holdings into a different entity? 

The best time is when your portfolio is at or below your original cost base, meaning the CGT triggered by transferring assets is minimal, or a capital loss is crystallised that can be carried forward to offset future gains. 

Transferring assets between entities is a taxable disposal at market value. In a bull market with large unrealised gains, the CGT cost of restructuring can be prohibitive. In a bear market, or when you are sitting close to your cost base, the same restructuring may trigger little to no tax, or even a loss. 

This is one of the most consistent pieces of advice Tax On Chain gives to clients: do not wait until gains have accumulated to think about structure. Set it up when the cost is low and position correctly for the next market run. 

 

Can I crystallise crypto losses to reduce my tax in Australia? 

Yes. Selling a crypto asset that has declined in value below your cost base crystallises a capital loss. That loss can be carried forward indefinitely and used to offset capital gains that have been made in the same year or in future financial years. Capital losses cannot be offset against ordinary income (e.g. salary or staking rewards), only against capital gains. 

For investors holding altcoins, meme coins, or speculative positions that have declined significantly and have little realistic chance of recovery, crystallising those losses before 30 June is a legitimate and often overlooked tax strategy. 

Tax On Chain works through this type of portfolio review with clients in the lead-up to EOFY each year, identifying positions worth crystallising and pairing them strategically against gains to reduce the overall tax position.  

 

Do I need to pay tax on crypto in Australia if I am just holding and not selling? 

Holding crypto is not a taxable event. You only realise a gain or loss when you dispose of the asset, whether by selling, trading, swapping, gifting, using it to purchase something, or transferring it to another entity. 

However, income derived from holding crypto is taxable at the time of receipt regardless of whether you sell the underlying asset. This includes staking rewards, DeFi yield, liquidity mining rewards, and airdrops. The ATO requires these to be declared as ordinary income in the financial year they are received, valued at the AUD market price on the date of receipt. 

 

How does Tax On Chain help Australian crypto investors? 

Tax On Chain is an Australian accounting firm specialising in crypto and digital assets. They service high net worth individuals, SMSFs, crypto businesses as well as providing forensic services in criminal and family law matters.  

The firm was founded by Rafael Franco and Oliver Woodbridge, who also host The On Chain Podcast.  

Tax On Chain is Australia’s most resourced crypto accounting firm, staffed by a team of Chartered Accountants with a genuine passion for the digital asset industry. Their clients span the full spectrum of the crypto economy, from retail investors and SMSF trustees, to some of Australia’s most successful traders managing portfolios in excess of $100M, global institutional staking providers, and the founders building onchain businesses. 

Services include tax structuring advice, crypto tax returns and reporting, crypto SMSF setup and compliance, tax planning, and crypto business accounting. 

Book a consultation: taxonchain.io 

 

Subscribe to The On Chain Podcast 

The On Chain Podcast brings together the sharpest minds across crypto, property and tax to help Australian investors make smarter, more structured decisions. Subscribe wherever you get your podcasts. 

Connect with the experts featured in this episode: 

• Tax On Chain – crypto tax accounting for individuals, businesses and SMSFs: taxonchain.io 

• Mortgage On Chain – specialist mortgage broking for crypto investors: mortgageonchain.com.au 

• The Daily Gwei – Ethereum education and media by Anthony Sassano 

 

The content in this podcast is for informational purposes only and does not constitute financial, tax, or legal advice. Please consult a qualified professional before making investment decisions.