jakiro
Author: BREAD, Translation: Bitchain Vision xiaozou
It is crucial for Ethereum to abandon its super-stable currency narrative – I’m not sure if it’s good or bad.
Why do I say that?Because users have now migrated from the mainnet, it is unlikely that we will see L2 re-restore ETH burning levels before the Dencun upgrade (March 24).
L2 is:
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Obtain execution rewards
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Have a user relationship
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Scaling throughput while maintaining relatively fixed Ethereum costs (with Alt-DA)
1, the world we envision
The modular roadmap has always had a major issue with user migration, and activity on the mainnet will drop when on-chain participants migrate to one or several of their favorite L2 solutions.This is something to be expected.
Over time, the user flow will basically look like this:
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The activity volume will decline, and a small group of users are scattered between several early L2, mainnet and Alt-L1.
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Then a large number of L2s will stimulate a surge in activity, which will be extremely active and actively compete for block space.
The demand for ETH block space (from users who are not very cost-sensitive, i.e. L2), and the combustion level is restored. The Ethereum ecosystem not only maintains its ultrasonic currency narrative (ETH deflation), but also attracts large-scale through scalable L2.user.marvelous!
However, after the Dencun upgrade, the situation is different.
2, What we see
Since the blobspace mechanism was introduced, L2 can significantly reduce transaction costs, we are witnessing the formation of another trend: L2s is swallowing more and more transactions and throughput while maintaining relatively stable Ethereum costs.
Here are the Base metrics for the past 90 days:
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Trading volume rose by about 75%
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Throughput increases by about 100%
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Ethereum payments remain flat
What happens when the L2 ecosystem grows infinitely without additional ETH overhead?They swallow other L2 users, no extra ETH is burned.They are like black holes, absorbing users in the Ethereum ecosystem.
This means you (most likely) will get something like this:
The law of index came into effect, and the dominant L2 absorbed disproportionately users, and Ethereum was still underutilized because despite the increase in users, the cost of paying to Ethereum remained relatively unchanged.
That’s why I think it’s time to give up on the super-stable currency narrative: because it may not be a decisive factor for a long, long time (especially measured on cryptographic time scales).
I don’t think this is a bad thing either.If you want ETH to be a currency, now it serves as a settlement and security guarantee chain, not a user chain, inflation is not a bad thing, it will help spread rapidly across all these ecology.
(Artificially) making it scarce will damage some of these properties (you can check out Bitcoin).This is a good narrative and it is really important.
3, some other ideas
Please note that these are all remarks about super-stable narratives, not targeting the asset’s own prospects, and I am still optimistic about Ethereum assets.
I think core developers are better off going forward with the modular roadmap rather than going back to the L1 extension altogether.They should have tried to expand L1 earlier before concessions to L2, but now the further benefits of user education and the L2 economy derive from it exceed the benefits of L1 expansion.
Do some optimizations (such as block time) to reduce unnecessary complexity, such as pre-confirmation, but be sure to stick to it.
It is not an exaggeration to say the importance of ETFs to ETH.They are structural game changers, and all topics at present will not matter to them in the next few years.
Ironically, L2’s abuse of ETH actually leads to bullishness?If I’m a corporate entity and want to make money from my user base, then Coinbase has already made the perfect blueprint for me.So this means that I am still in the Ethereum ecosystem and continue to expand on this narrative, but I do not accept it completely.I don’t know which side of the pendulum is more important.
