Research firm: Ethereum 2.0 and EIP-1559 will boost ETH's long-term value proposition

Published on by Cryptoslate | Published on

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Unlike Bitcoin, Ethereum has not earned the status of being a digital store of value.

A prominent cryptocurrency research company, argued in a recent report that the introduction of staking through Ethereum 2.0 and EIP-1559 will lend to a much stronger long-term value proposition for the cryptocurrency.

How Ethereum 2.0 and EIP-1559 could drive ETH's long-term value proposition.

"The dApps built on top of the Ethereum network are driving increasing fees leading to more scarce bandwidth, but are parasitic in that the on-chain value derived from activity does not increase fundamental value to ETH.".

Delphi writes that this changes with the introduction of Proof of Stake with ETH2 and the implementation of Ethereum Improvement Protocol 1559.

"Tying things together, EIP 1559 and staking [create a] symbiotic relationship where not only does increase usage drive value but the introduction of cash flows to a wider group of participants for securing the network creates a more effective long term value proposition [for ETH].".

The issue right now is that Ethereum has an uncertain monetary policy that may disincentivize investors from holding the cryptocurrency over the long run.

Delphi's report on the state of Ethereum comes at an opportune time as ETH2's launch has seemingly drawn quite close.

The duo also noted that since staking isn't fully rolled out until later phases of the Ethereum 2.0 upgrade, there may be centralization on the network for the first year or two.

After months and years of development, Ethereum 2 is finally drawing close.

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