Ethereum, as of now, is the second-largest digital asset and the first permissionless international economy. Ethereum is slowly revolutionizing the global financial system. In 2020, Eth reported a rise in its price by over 70%. 2021 has kicked off at a high notch for ETH, with its price hitting $976.89 as of Jan 4.
Factors contributing to the rise of Ethereum
Ethereum owes its surge of prices to speculations from the crypto market. GOETH community is predicting a rise in the cost of Eth in this decade. Ethereum will rise even more when the speculators invest in the product.
Staking is the new use of Eth. Staking is the process of locking up Ethereum tokens for some time. The yields on staking on Eth is currently at 20%. What’s more, is that staking on Ethereum allows for a pool of staking for small investors. The pool of staking favors the GOETH community at large as every investor has a say. Investors in the GOETH community can stake directly or through a third party.
Ethereum staking will bring mining to an end. During the initial period of introduction of staking, it will co-exist with mining but will eventually be eliminated in the long run. Mining is mainly used in Bitcoin, and in Ethereum, the reward to miners is new Ethers. These rewards are about 3.6% of Esther’s total supply yearly. The elimination of mining will lower the new pool. Expectations are such that when mining is censored, there will be a program to reduce transaction charges to counterbalance staking rewards and make total issuance of Ethereum negative, thus reducing supply. This will positively favor the GOETH community as they will not need any middlemen, miners.
One of the uses of Ether is to settle gas fees on the network. The year 2019 saw a good number of Eth being used to pay gas fees of about $9.5k daily. GOETH community can bet on an increase in a total gas payment following the launch of ETH 2.0. This will compel corporations to buy Ether to use the gas on the network.
- Collateral for applications
Ether is used as security for programs in Ethereum to ensure that they function efficiently. For instance, Ether is used as collateral for DAI, a stable coin that tracks the dollar created by MakerDAO. The GOETH community need not worry about the price drop of Ether as DAI remains unchanged. MakerDAO contributes to the scarcity of Ether when they have many users to purchase Ether.
