• Will Ethereum have a monetary premium?

  • Sources:

    There is a rich discussion among experts about whether Ethereum will have a monetary premium. Here are some key insights:

    1. Historical Context:

      • Haseeb Qureshi notes that Ethereum was once considered a "reserve currency" for ICOs in 2017, providing a form of monetary premium. However, he points out that currently, Ethereum (ETH) does not function as money in common transactions and is mostly viewed in terms of its USD price, similar to Bitcoin 1.
    2. Future Valuation and Premium:

    3. Critiques and Alternative Views:

      • Chris Dixon presents a counterpoint, suggesting that Ethereum could fulfill its vision of being a global computing fabric and be valuable without necessarily having a monetary premium. He sees the technological opportunities as vast enough to drive its value 4.
    4. Comparisons and the Need for Monetary Stability:

      • Ryan and David further discuss the necessity of monetary premium for supporting platforms such as DeFi, emphasizing that a base layer asset, like Ethereum, must have monetary premium to secure economic activity effectively 5.
      • Concerns about asset legitimacy are raised, with the point made that for any asset to maintain a monetary premium, it must have a credible and stable monetary policy, which adds to its legitimacy and mitigates risks associated with centralized control 6.

    These discussions underscore that while Ethereum does hold potential for a monetary premium, it is dependent on various factors such as its role in the ecosystem, security, and the broader adoption of decentralized finance.

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