Ethereum

Comparison | Scaling

The valuation model for Ethereum.

Website | Whitepaper | Tokenomics.

Content

• Thesis
• Governance
• Asset Value
• Problems

Engineering

• Architecture
• Smart Contracts
• Wallets
• Modular Components

Investment Thesis

See Investment Thesis Checklist

Governance

• Galaxy Research

Asset Value

As demand for compute power on Ethereum goes up, more ETH is burned than supplied, becoming deflationary.

Income: Value capture through gas fees.

1. Block (compute power) space
2. Capability to organise order of block transactions

Expense: Incentive costs to validators.

Problems

How will Ethereum solve the fragmentation problem to focus developer attention? Does this matter?

Questions

How will Ethereum solve the fragmentation problem across L2s — and does developer attention fragmentation ultimately hurt or help the protocol's long-term value capture?

• If L2s capture transaction fee revenue, what accrues to ETH holders at the base layer — and is that enough to sustain the security budget?
• At what point does Ethereum's advantage in developer tooling and composability stop compounding and become a liability as simpler chains gain traction?
• Which Ethereum design choice — the merge to PoS, the blob roadmap, or the L2 centric architecture — looks most prescient in hindsight at a 10-year horizon?