🚨ETHEREUM FLIPPING THE SCRIPT: FROM INFLATIONARY TO DEFLATIONARY? 🚨
With market sentiment in "Extreme Fear" and $BTC seeing outflows, all eyes are on Ethereum and the recent Fusaka upgrade. Experts are pointing to a major shift: The new protocol could trigger a supply crunch that hasn't been seen in years!
What do you need to know?
A "Rollup-First" Ethereum: Instead of processing everything on Layer 1 (L1), Ethereum is now a settlement layer, relying on Layer 2 (L2) rollups like Arbitrum, Optimism, and Base for the bulk of transactions.
The Problem: Until now, L2s have benefited from L1 security without contributing much to the ETH burn, leading to net inflation.
Fusaka's Solution: The latest upgrade introduces EIP-7918, which mandates that Layer 2 transactions contribute to the ETH burn. Projections suggest this could burn an additional 200,000–400,000 ETH per year, potentially making ETH net deflationary again.
How does it work? The PeerDAS system makes rollup data cheaper and more plentiful by sampling it, rather than requiring full downloads. This increased efficiency allows L2s to thrive, but it also increases the total $ETH burn as more L2 activity is generated.
For the average user, what does this mean?
Lower L2 Fees: You'll likely see lower transaction costs on your favorite rollups, making everyday DeFi and NFT activities cheaper.
Long-Term Bullish Pressure: If the burn rate accelerates as projected, the resulting supply scarcity could add upward pressure to the price of $ETH over the long run, even in a cautious market.
The Big Question:
With the Fusaka upgrade now live, will institutional adoption follow and accelerate ETH's deflationary path, or will the broader market downturn limit its impact?
🤔 What do you think? Drop your predictions below! 👇
