Bankless Founder Who Dumped ETH Is Up Big After Three Months

Original title: "Bankless Founder Who Dumped ETH Is Up Big After Three Months"

Original author: Xiao Bing, Shenchao TechFlow

On May 21, David Hoffman, co-founder of Bankless and the most prominent evangelist of the Ethereum ecosystem for six years, posted a tweet in the early morning, essentially saying that "the vibe on crypto Twitter has really changed lately, and he sold his last bit of ETH."

Three and a half months later, he has become a big winner.

What exactly did Hoffman buy?

In early June, Hoffman fully disclosed his portfolio shift on X, with the funds from selling ETH deployed in two batches:

The first batch, about 50% of the funds, was immediately allocated to four assets after selling ETH: VVV (the governance token of Venice AI), NEAR, ZEC, and HYPE. He explicitly mentioned in his tweet that he bought NEAR at around $1.4.

The second batch, about 50% of the funds, was set aside for DCA (dollar-cost averaging). His exact words were "keeping it to slowly buy something that hasn't pumped yet." This money ultimately went entirely into LIT (Lighter, a token for an on-chain perpetual contract exchange based on zkRollup).

His logic for buying LIT was exceptionally clear: exchanges are always the best business model in crypto; Lighter's buyback speed is about twice that of HYPE; zk circuits allow users to permissionlessly verify whether the exchange is following its own rules; the product has lower latency, better fee structure, and supports more assets including pre-IPO markets.

When asked "how to choose between LIT and HYPE," his answer was that LIT is both the Beta and the Alpha of HYPE. He even posted a tweet at the end of June specifically expressing regret for not buying more LIT.

This is a very clear investment framework: betting on the privacy narrative with ZEC, on the structural growth of the on-chain derivatives sector with HYPE and LIT, on cross-chain infrastructure and AI Agent narrative with NEAR, and on decentralized AI inference with VVV.

Five assets covering four narrative tracks, none of which is related to Ethereum L1 valuation.

Report card

Let's compare the prices before and after Hoffman disclosed his positions. He sold ETH in late May, the first batch was built from late May to early June, and the DCA into LIT continued until mid-June. The following uses approximate prices in early June as the entry baseline, compared with the latest prices in early September:

ETH: sold at about $2,100 → currently about $2,450, up about 17%.

ZEC: entry at about $540 → currently breaking above $1,200, up over 120%.

On September 6, it briefly touched $1,200, doubling in three months. The catalyst was the Grayscale ZEC spot ETF (ZCSH) listing on NYSE Arca on August 25, with AUM swelling from $300 million to $460 million in two weeks, combined with a short squeeze of $46 million in liquidations.

HYPE: entry at about $56 → currently about $87, up about 55%.

On September 6, it hit a new all-time high of $89.54. Hyperliquid's token burns have cumulatively exceeded $4 billion, and average daily protocol revenue remains at $2.26 million. This on-chain cash machine's ability to generate revenue is still accelerating.

LIT: entry range about $1.5-2 (DCA average) → currently about $4.7, up about 135%-210%.

On September 5, it hit a new all-time high of $4.95. As Hoffman's heaviest single position (50% of total funds), LIT contributed the largest absolute return in the entire portfolio.

NEAR: entry at about $1.4 (confirmed by Hoffman himself) → currently about $2.37, up about 69%.

VVV: entry at about $16-18 (in early June, VVV was near its ATH area, hitting a historical high of $21.32 on June 3) → currently about $17, basically flat.

This is the weakest performer among the five assets, and the only position where Hoffman did not publicly add or express regret.

Let's make a rough portfolio return estimate: assuming 50% of funds are equally weighted among VVV, NEAR, ZEC, and HYPE (12.5% each), and 50% allocated to LIT, using a median estimate, the overall portfolio return is about 90%-120%. Over the same period, ETH rose about 17%.

Hoffman's portfolio outperformed ETH by at least 70 percentage points.

Where did he win?

Looking closely at this report card, the most noteworthy thing is not how much each asset rose, but how Hoffman's selection logic was repeatedly validated by the market over three and a half months.

ZEC's surge was traceable. Grayscale's ETF application had been going through the SEC process since November last year, and the official listing on August 25 merely converted a long-brewing institutional variable into price. When Hoffman bought in May, ZEC had already risen from over $30 at the start of the year to over $500. He chose to enter during the window of "already up a lot but ETF not yet landed," essentially betting that the certainty of the catalyst outweighed the short-term price risk.

LIT's logic is even more worth dissecting. While everyone was talking about how HYPE could become the on-chain Chicago Mercantile Exchange, Hoffman chose an earlier-stage, smaller-market-cap, but potentially more aggressive competitor in product structure. His judgment framework was "finding higher-beta elasticity on the same track," combined with structural reasons like "faster buyback speed, transparency premium from zk verification, and user migration potential from lower fees." In hindsight, LIT rose about 500% from the bottom to now, validating this approach.

NEAR's 69% return ranks fourth in the portfolio and doesn't seem dazzling. But considering NEAR Intents' current role as a "toll booth" in the ZEC rally (ZEC-related trading pairs account for nearly 40% of NEAR Intents' total volume), Hoffman may have inadvertently built a self-reinforcing portfolio: the more ZEC rises, the greater the trading flow through Zashi wallet and NEAR Intents, the higher the fee income for NEAR Intents, and the stronger the buyback of NEAR. There is an implicit positive feedback loop between the two assets he bought.

VVV is the only position that hasn't paid off. Venice AI's narrative as a decentralized AI inference platform briefly spiked in early June but then lost sustained catalysts, and Hoffman did not publicly add to it.

The real question

Hoffman's report card provides a signal worth deeper investigation than "who rose how much": the value center of the crypto market is shifting from L1 valuation to application-layer revenue.

The ETH he sold is an L1 asset, with valuation logic built on network effects, developer ecosystem, and gas burn mechanism. Among the five assets he bought, HYPE and LIT's valuation anchors are verifiable protocol revenue and buybacks, ZEC's valuation anchor is institutional demand (ETF) and on-chain observable privacy usage data (shielded supply ratio), NEAR's valuation anchor is cross-chain settlement layer volume and fees, and VVV's valuation anchor is actual call volume of AI inference services.

The common feature of these five assets is: valuation comes from independently verifiable on-chain activity data, not narrative promises about the future.

Hoffman selling ETH has nothing to do with Ethereum's technical merits. He himself said he "still believes Ethereum will win." He just realized earlier than most people one thing: in a market with scarce liquidity, faith does not generate returns; only verifiable cash flow and quantifiable demand generate returns.