Bankless Co-Founder David Hoffman Faced Controversy After…

Bankless co-founder David Hoffman's decision to sell his Ethereum holdings attracted criticism from the crypto community in May, but several assets he subsequently backed have dramatically outperformed ETH, with LIT gaining nearly 369% over the period. Hoffman disclosed in May that he had sold all of his ETH, marking a particularly notable move given Bankless' long association with the Ethereum ecosystem. He subsequently identified opportunities including Lighter's LIT, Zcash's ZEC, NEAR and Venice Token's VVV.Performance data highlighted this week shows LIT gaining approximately 368.75% from the period around Hoffman's disclosed ETH sale through early September. ZEC increased approximately 110.41%, while NEAR rose 54.23%. ETH gained only around 8.15% over the comparable period, while VVV declined approximately 5.55%. Those figures measure token performance rather than Hoffman's personal portfolio return because his exact entries, allocations and subsequent trades have not been publicly disclosed.

Hoffman Said Ethereum Was Still Strong

Hoffman's ETH sale generated controversy because of his long-standing advocacy for Ethereum. Bankless has spent years covering and promoting the Ethereum ecosystem, making the decision by one of its founders symbolically significant even though it represented a personal portfolio choice. Hoffman explained that he had not become bearish on Ethereum itself. Instead, he argued that his long-held "ETH is money" investment thesis had largely played out and that Ethereum's success as decentralized infrastructure would not necessarily translate proportionally into higher ETH valuations.Ethereum, he argued, increasingly provides secure blockspace and infrastructure close to cost rather than maximizing economic extraction for its native token. Hoffman said he expected Ethereum to continue succeeding as a network but saw greater potential returns elsewhere. That distinction separated his view of Ethereum technology from his investment thesis for ETH.

LIT and ZEC Deliver the Biggest Gains

LIT has provided the clearest validation of that rotation so far. Lighter operates an Ethereum-based perpetual futures platform using zero-knowledge technology and has increasingly positioned itself as a competitor in the decentralized derivatives market. The protocol also gained mainstream exposure through Robinhood, which selected Lighter to power perpetual futures trading inside Robinhood Wallet. Zcash represented a different investment thesis. Hoffman had publicly developed a bullish ZEC thesis before announcing his ETH exit, arguing in May that demand for financial privacy could strengthen as artificial intelligence makes blockchain surveillance increasingly sophisticated.Zcash uses zero-knowledge cryptography to enable shielded transactions that can conceal transaction information. ZEC subsequently became one of 2026's strongest-performing major cryptocurrencies, while renewed institutional interest and the broader privacy narrative helped push the asset to new highs. The results nevertheless do not establish that Hoffman's portfolio gained 369%. The percentage represents LIT's market performance from an approximate common starting point. Without verified purchase prices, allocation sizes or sales, Hoffman's actual investment return cannot be calculated. There is also substantial survivorship risk in judging an investment decision after several months.LIT, ZEC and NEAR are smaller and generally more volatile than Ethereum, meaning their ability to generate dramatically larger gains also comes with greater downside risk. Still, the relative performance is striking. Hoffman faced criticism for abandoning an asset closely associated with his professional identity while ETH was trading near a local low. ETH subsequently recovered. But the alternative assets he highlighted recovered much faster. For an investor whose stated objective was not to abandon Ethereum but to find opportunities capable of outperforming it, the rotation has—at least through early September—worked substantially better than simply continuing to hold ETH.