Unchained Is ETH on Its Way to Becoming Ultra-Sound Money? Yes, Says Justin Drake - Ep.262
Aug 10, 2021
Justin Drake, a researcher at the Ethereum Foundation, dives into the implications of Ethereum's recent upgrades, including EIP-1559 and the transition to proof-of-stake. He argues that burning ether is beneficial for its economy and discusses how Ethereum could evolve into 'ultra-sound money,' surpassing traditional commodities. The conversation touches on the projected deflationary effects post-merge, the decreasing net sell pressure, and even some concerns about Bitcoin's future viability in a transaction-based world.
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Drake's Crypto Journey
- Justin Drake's crypto journey began in 2013 with Bitcoin, leading to a Cambridge meetup group and a Bitcoin ATM venture.
- His startup on OpenBazaar struggled, but his Ethereum data availability solution ideas landed him a job at the Ethereum Foundation.
EIP-1559's Impact
- EIP-1559 enhances user experience by making transaction fees predictable, improving security by reducing MEV (miner extractable value), and burning excess fees.
- This burning mechanism strengthens ETH's monetary policy by decreasing supply and capturing value from Ethereum's utility.
ETH as Money
- Money is defined as a money candidate (durable, divisible, etc.) with monetary premium (value beyond utility), like gold.
- ETH has monetary premium as collateral in DeFi and staking, and EIP-1559's burn mechanism enhances scarcity by destroying ETH used for transactions.
