<\/p>\n
In laying out the bull case for ether on Wednesday, Fidelity\u2019s digital assets subsidiary said dapps built on Ethereum are \u201ccapable of things that could not be done on Bitcoin\u2019s network due to Ethereum\u2019s superior programmability.\u201d<\/p>\n
Researchers who compiled the report<\/a> said investors could view ether (ETH<\/a>) as an \u201caspiring\u201d form of money.\u00a0<\/p>\n Ether, they wrote, will \u201clikely face significantly more headwinds than bitcoin to become widely accepted as a form of money.\u201d<\/p>\n Why? Unlike bitcoin (BTC<\/a>), which has a hard cap of 21 million, ether technically has \u201cunlimited supply parameters\u201d \u2014 even though there is a fee burning mechanism. It was introduced by upgrade EIP-1559<\/a> in August 2021 and has led to deflationary periods for ether.\u00a0<\/p>\n There\u2019s uncertainty relating to future upgrades to Ethereum and the number of the tokens in circulation on an untethered schedule, according to the report. And the cumulative effect has been that ether\u2019s supply has a slew of obstacles before it can be \u201creliably consistent to that of other store of value assets.\u201d<\/p>\n \u201cIt seems unlikely that any other digital asset could improve upon bitcoin as a monetary good because bitcoin is viewed by some as the most secure, decentralized, sound digital money to this point, and any \u201cimprovement\u201d would require tradeoffs,\u201d the report said.<\/p>\n Fidelity acknowledged that Ethereum\u2019s use of smart contracts<\/a>, which unlocks a whole new layer of programmability, is ether\u2019s \u201ctrue differentiating factor.\u201d<\/p>\n The other thesis Fidelity discussed behind ether\u2019s value was its potential to generate yield through staking.\u00a0<\/p>\n The act of staking ether on the network has changed dramatically since the Shapella upgrade in April 2023<\/a>.<\/p>\n Fidelity said the payout structure for validators attesting to the blocks of each epoch and for block proposals proffer incentives to stake the maximum of 32 ETH. The base reward is proportional to validators\u2019 effective balance.\u00a0<\/p>\n The report also pointed out that base reward is inversely proportional to the number of validators.<\/p>\n \u201cThe rationale for this issuance formula is to ensure enough validator participation because higher yields are paid if the validator set is small, while also guaranteeing that unexpectedly high issuance will not occur if many validators participate,\u201d the report said.<\/p>\n This balance, Fidelity<\/a> argued, has allowed Ethereum to sustain yield payouts. Plus, there are forms of yield paid out by users including MEV and tips, which supplement the network\u2019s payout burden.\u00a0<\/p>\n Fidelity\u2019s ultimate conclusion was that increased activity on Ethereum<\/a> does in fact drive block space demand, which in turn, generates cash flow for token holders.\u00a0<\/p>\n But, the report said there remain \u201ccomplex, nuanced\u201d factors, including protocol and scaling upgrades, that make Ethereum\u2019s future uncertain for investors.<\/p>\n Get the day\u2019s top crypto news and insights delivered to your email every evening.\u00a0Subscribe to Blockworks\u2019 free newsletter<\/a>\u00a0now.<\/strong><\/p>\n Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can\u2019t-miss tweets and more from\u00a0Blockworks Research\u2019s Daily Debrief<\/a>.<\/strong><\/p>\n Can\u2019t wait? Get our news the fastest way possible.\u00a0Join us on Telegram<\/a>\u00a0and follow us on\u00a0Google News<\/a>.<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" In laying out the bull case for ether on Wednesday, Fidelity\u2019s digital assets subsidiary said dapps built on Ethereum are \u201ccapable of things that could not be done on Bitcoin\u2019s network due to Ethereum\u2019s superior programmability.\u201d Researchers who compiled the report said investors could view ether (ETH) as an \u201caspiring\u201d form of money.\u00a0 Ether, they […]<\/p>\n","protected":false},"author":2,"featured_media":144947,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-144946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/144946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=144946"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/144946\/revisions"}],"predecessor-version":[{"id":145825,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/144946\/revisions\/145825"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/144947"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=144946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=144946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=144946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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