Based Rollups could allow Ethereum to change its economic model from one that resembles a fixed supply to a dynamic model capable of accommodating a higher demand and thus raise the price of ETH by 100x in the long run,
Crypto analyst Adam Cochran, on Sep. 11th, shared his insights on how Based Rollups could revolutionize Ethereum’s monetization strategy. This new method changes the handle for validators, so the ecosystem is more attractive for them.
Based Rollups are the idea of Layer 2 solutions, which will now pay Ethereum validators for processing power, not only for data availability. This addition may be one reason why staking yields would gain tremendously, even with too much ETH locked up.
In his post, he mentioned a few indispensable positives. One of the features is the improved staking value, which means validators would be able to receive yields of up to 15% without the need to stake large amounts of ETH.
Monetization opportunities for Ethereum
Moreover, new monetization opportunities like MEV (Maximal Extractable Value) auctions and proof-of-burn mechanisms, the demanded amount of ETH could be significantly positively surprised.
In addition, the interoperability of the different rollups could result in a higher gas demand. This is because cross-rollup transactions would be more feasible. Therefore, the congestion on the main Layer 1 blockchain would be avoided.
The analyst points out that these elements, along with Ethereum’s deflationary mechanism, may give rise to a situation where the minimum viable issuance would be equal to 0%. At the same time, staking yields would remain competitive with traditional financial instruments.
This dedicated direction of motivation for Layer 2 solutions and Layer 1 validators is a huge step for Ethereum. In this case, the total network usage would urge the staking of ETH for the first time. This is more significant than the issuance rates.
Cochran candidly asserts that such a radical transformation can lead to ETH reaching $100,000 in the next decade. Even the value capture issue is still challenging, but the usability improvement and the ecosystem goals alignment have already made considerable advancement.
Nevertheless, remember that Ethereum has already made great strides, such as shifting from proof-of-stake to EIP-1559. Definitely, Rollups are an additional step in the development of Ethereum as a worldwide computing platform.
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