Maximise your Metaverse potential, giving you daily rewards and a passive income of 0.5% daily I'm going in!

A look into the future of the Ethereum economy

5 min reading

Lets look into how much growth Ethereum has achieved throughout the years before and what does it have in store for future.


While weeks and months often look like years in cryptocurrencies, it's only been 60 days since the hard fork with EIP 1559 was embedded in the Ethereum core network. The data world of EIP 1559 has emerged, but in the end the upgrade is still in its early stages. In fact, a few weeks ago I wrote about Nick Carter's very passionate proposal for Ethereum and it's probably too early to assess the impact of EIP 1559 on the network. However, this week I changed my tune a bit and looked at the potential impact of burning basic upgrade fees and their impact on Ethereum's longevity.

At a very high level, Ethereum uses block bonuses under Proof-of-Work (PoW) and Proof-of-Stake (PoS) to stimulate miners and chain validators. These incentives help secure the network adequately by paying those who are useful in confirming transactions and registering chain status, which in turn encourages competition to build a large and distributed base of miners/validators. Bitcoin uses a similar model, but every four years the amount paid in block prices decreases until the price becomes very insignificant and the supply of bitcoins reaches 21 million. As block rewards become insignificant, Bitcoin miners will be forced to rely on transaction fees to stay profitable. It makes sense that the network should maintain a high enough level of activity to pay miners for their services.

Ethereum and EIP 1559, on the other hand, now take a reverse approach to Bitcoin's security budget. EIP 1559 has taken most of the revenue from transaction fees miners previously received, but Ethereum will continue to broadcast rewards for blocks from miners (and possibly validators) indefinitely. While Ethereum uses an unrestricted supply approach, the newly introduced tax burden will help fight Ether inflation. Bitcoin's role as an inflation hedge is certainly a big part of the asset's success. His portrayal of “digital gold”, however, leads to less network activity, as the asset is at least initially a store of value rather than a medium of exchange. This issue has some wondering if transaction fees are enough to keep miners interested, whether miners will adapt, or whether the network needs to move to an updated compensation model.

It might be wrong to say that EIP 1559 "solved" this persistent payment problem for miners because here too, the constant supply of bitcoins is what makes investing in assets so attractive. On the other hand, the supply of ether will depend heavily on network activity and demand for block storage space. The Bitcoin network is still years away from realizing concerns and will likely surprise me with its adaptability and persistence. My comparison between the two networks is how they approach the incentive to dig, something I think EIP 1559 will likely address with its fee mechanism. A future where Ethereum can continue to subsidize validators without reducing Ethereum owners looks very promising for the network.

Below is an overview of the Ethereum 2.0 Beacon Chain network activity over the past week. For more information on the indicators presented in this section, see our 101 Eth 2.0 Indicator Discussion.

Approved claims

  • The Altair upgrade shifts the validation reward to a newly created "sync commission" of 512 randomly selected validators. HISTORY: The sync committee is responsible for supporting lightweight clients and signing the latest header blocks. The probability that a Validator will be elected to the current committee is 1/489 and the reward/penalty for confirmation increases over the 24-hour period that they are part of the synchronization committee.
  • CryptoPunk NFT appears to be selling for $530 million after transactions in the chain triggered a bid signal last Thursday. While CryptoPunks have sold up to 4,200 ETH in the past, fake sales will be the largest by an order of magnitude. The owner appears to have used a quick loan to make a fake punk purchase by borrowing and paying back 124,000 ETH. This move is likely a marketing ploy.
  • Cream Finance was exploited through quick loans worth more than $260 million in custodial assets. Cream is a well-known decentralized financing (DeFi) platform for loans with a history of exploitation. The express loan manipulated the cost of Cream's flawed collateral, artificially high prices, and enabled significant creditworthiness for operators. The exploiters demonstrate significant knowledge of DeFi, maximize loot returns, and hide their tracks with the Ren-Bitcoin bridge.

Aave was reportedly vulnerable to exploits similar to Cream, which prompted Justin Sun to remove more than $4 million in warranties. Vulnerabilities in xSushi collateral frightened Aave depositors and resulted in a ~20% decrease in Total Locked Value (TVL). The management process prevented immediate correction by the team and errors can still be used today. Analysis by the Aave team shows that manipulation is not profitable for hackers.

Currency Exchange rate Buy cryptocurrency

Buy crypto now

Dear customer,

We use cookies to provide our services correctly and safely. Cookies are small text-based data sets that shall be saved on the device you are using in connection with the use of this instnat website. Cookies are created in order to ensure proper functioning of thes instant website. By clicking the button "I accept and go to the website", you implicitly agree to creation of the cookies on your computer and to deploy automatic tracking and data collection and processing on behalf of the Lushup Holdings FZ LEE. Click the above-captioned button is also tantamount to accepting website's privacy policy. Closing the notification by means of "X" is unequivocally connected with your consent. If you do not agree to any of the above, please discontinue using our Website.

“Cookies” shall make an identification of the software used by you and to customization of this instant website to your needs. Cookies contain the name of the domain from which they origin, duration of period of their storage on your computer and an assigned value.

Third party cookies:
We also use third-party cookies for the following purposes:

  • creating statistics - helping to understand the way Users use the Website, which allows to improve its structure and content with use of the analytical tools
  • defining a user profile - in order to display custom-tailored content in advertising networks.

External entities that might be source of any third-party cookies on this instant Website are as follows:

Using a settings of your web browser or by using pre-set configuration tools available in our service you can independently and at any time change the settings concerning your use of the “cookies”, specifying the conditionsof their storage and how your device is creating and downloading them. These settings can be changed to block the automatic handling of cookies in the settings of your web browser or inform about their placement on your device each time.

Detailed information about the options related to use of “cookies” is available in the settings of your software (web browser).

Service privacy policy

This instant document lays out the principles of the Privacy Policy on the website (hereinafter referred to as the "Website" or "Service"). The administrator of the Website is Lushup Holdings FZ LEE, Fujairah - Creative Tower, P.O.Box 4422 Fujairah, United Arabs Emirates.

The full document to read the ommyo privacy policy is available in this document.

Advanced settings can be changed in your browser.