In this episode, Christine Kim and Will Foxley discuss with David Hoffman, the co-founder of Bankless, the market implications of a dual Ethereum blockchain and what new realities staking presents to the long-term value proposition of ether.
According to Hoffman’s “Ether as a triple-point asset” thesis, Ethereum 2.0 bolsters ether’s value proposition as a capital asset. This is because Eth 2.0 enables staking on the protocol level.
For all ether holders with a minimum balance of 32 ETH, they can earn an annual percentage return for locking in their crypto assets to the network and becoming a validator. This is a use case for ether on top of its existing functionalities as a form of payment for fees and as a store of value in decentralized finance applications.
Eth 2.0 strengthens the diverse ways in which ether can be used. However, it also complicates the monetary policy of the Ethereum protocol. Instead of ether issuance being restricted to one blockchain network, the launch of Eth 2.0 has effectively created two parallel networks both issuing ether and driving up the crypto asset’s total supply.
However, the dual issuance of ether is a temporary state that in the long run will make the Ethereum economy more “sustainable,” according to Hoffman.
“Ethereum has committed to this early research and development phase in the beginnings of its genesis. That’s the whole entire effort behind Eth 2.0 and that’s why the monetary policy of ether is so jagged and unpredictable because the monetary policy of ether is a tool for Ethereum to reach its goals,” said Hoffman.
And what are Ethereum’s goals exactly? Listen to the full episode to find out!
For more weekly insights on Eth 2.0 development, be sure to check out and subscribe to Will Foxley and I’s weekly newsletter, Valid Points.
Links mentioned in the podcast:
EthHub Explainer on Ethereum Monetary Policy -
https://docs.ethhub.io/ethereum-basics/monetary-policy/
Lyn Alden’s blog post -
https://www.lynalden.com/ethereum-analysis/
Rocket Pool -
https://www.rocketpool.net
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