Bankless The Debate Over ETH's Monetary Policy | DH + RSA
Apr 10, 2024
The Ethereum community is in a heated debate over the future of ETH's monetary policy. Key topics include the transition from block rewards to a deflationary model and the impact of EIP 1559 on network economics. Concerns about staking dynamics and the risks of centralized exchanges are addressed, emphasizing the importance of self-custody. Discussions also highlight the philosophical clashes between traditional monetary systems and crypto's algorithmic frameworks, making a compelling case for the need for flexible policy adjustments to ensure economic stability.
AI Snips
Chapters
Transcript
Episode notes
Monetary Policy Definition
- Monetary policy dictates how an entity controls its money supply.
- Any human-influenced money has a monetary policy, unlike naturally occurring elements like gold.
Money Types (M0, M1, M2)
- M0, or base money, represents the most fundamental level of currency in an economy, including physical cash and digital reserves held by central banks.
- M1 and M2 are derivative forms of money, representing funds held in commercial banks and other financial institutions.
M0 Supply Chart Analysis
- The M0 money supply chart reveals two distinct eras: a period of steady, linear growth until 2008, followed by a more erratic and unpredictable trajectory.
- This shift reflects the Federal Reserve's increased willingness to manipulate monetary levers after the 2008 financial crisis.