Ethereum scaling plans and network applications should start supporting the network’s native ether (ETH) to increase the asset’s value, co-founder Vitalik Buterin wrote in a post on Friday.
“We need to pursue a multi-pronged strategy, to cover all possible major sources of ETH’s value as a triple point asset,” Buterin said as part of a longer post on the upgrade. Layer 2 scale, security and interoperability. “Widely agreeing to cement ETH as the primary asset of the larger Ethereum economy (L1+L2), supports applications using ETH as primary collateral.”
Buterin called for implementing incentives for Layer 2 networks to allocate a portion of their fees to ETH using mechanisms such as burning fees, staking them permanently, or directing the proceeds to public goods in the Ethereum ecosystem.
His comments come amid growing criticism of the Ethereum Foundation, the grant-making nonprofit that helps support Ethereum, as the asset loses market cap and spirit to competitors.
The widely watched ether-bitcoin ratio is down to 2021 levels. Bitcoin touched a record high above $109,000 earlier Monday and has returned 160% to investors over the past year. Ether, meanwhile, has gained just 40% during the period and is hovering around 30% below its 2021 peak, a Coindesk analysis showed.
Another call was to increase Ethereum’s blob count while setting a minimum price for blobs, viewing them as “another possible revenue generator.”
“If you take the average blob fee from the last 30 days and assume it stays the same (due to induced demand) while the Blob count increases to 128, Ethereum would burn 713,000 ETH per year,” noted Buterin, adding that such a favorable demand curve was “not guaranteed” and therefore not an isolated strategy to lower the value of Eth.
Blobs are like regular transactions with an extra piece of transaction data attached. However, unlike traditional transactions, Blob transport transactions do not permanently occupy the main space and are only available for 18 days.
Since November, Blobs’ daily count has averaged 21,000 records, with just two Layer 2s – Coinbase’s base and the global chain – accounting for 55% of daily activity. Sustained Layer 2 demand could quickly exhaust available capacity, as a Coindesk analysis noted earlier in the week.
