Ethereum (ETH)

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Ethereum’s Dencun upgrade went live on Wednesday, introducing a mechanism to reduce costs associated with transactions on layer 2 solutions that batch and compress transactions before sending them to the mainnet.

The latest information shows the upgrade is living up to expectations.

According to blockchain analyst Marcov’s Dune-based tracker, the average cost of transactions on scaling solution Optimism has dropped to nearly 4 cents, down significantly from the recent average of around $1.4. The average fee on Coinbase’s layer 2 solution Base fell to 3 cents from roughly $1.50, while Arbitrum’s declined to 40 cents. The average fee on zkSync and Zora also fell.
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JPM dismisses SEC threat to ETH:
Analysts at %JPMorganChase (NYSE: $JPM) say %Ethereum (CRYPTO: $ETH) could avoid being labeled a "security" and regulated like a stock in the U.S.

In a research report, JPMorgan notes that staking platform Lido's share of staked Ethereum has fallen considerably in recent weeks, lowering concerns about concentration in the network.

Because of this change, there is less risk that Ethereum will be designated as a security, according to the analyst report.

"The share of Lido in staked ETH has decreased further from around one third a year ago to around a quarter at the moment," says JPMorgan.

JPMorgan adds that regulators at the U.S. Securities and Exchange Commission (SEC) have acknowledged that "tokens on a sufficiently decentralized network are no longer securities as there is no controlling group…"
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https://www.msn.com/en-us/money/sav...-could-avoid-security-designation/ar-BB1l8cgK
 
Growing pains:
When is a discussion about the issuance curve of staking rewards in Ethereum not really a discussion about the issuance curve of staking rewards in Ethereum? When it’s really about Ethereum governance and Ethereum’s monetary policy.
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... the reaction on social media has tended to focus less on the technical details of this proposal and more on the idea that it involves changing Ethereum’s monetary policy. In other words, it’s not really issuance that is at stake, so much as people have a sense that the “Core Devs” (a somewhat ambiguous term in Ethereum), particularly those associated with the Ethereum Foundation, have not engaged in the appropriate level of “rough consensus” from the wider set of stakeholders.

The critics tend to be Ethereans associated with the “ultra sound money” subculture that hopes to establish ETH as sound money (in a similar way as people think of bitcoin as sound money). For them, changing the issuance curve is a red line because it’s reminiscent of central bankers constantly tweaking monetary policy.
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More:

 
Ethereum's recent Dencun upgrade, which was designed to reduce fees and help scale the network, has caused ether (ETH) to revert back to an inflationary asset -- potentially reversing one of the key benefits of the 2022 Merge.
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Ether was a deflationary asset following the Merge, with the total supply of the token dropping from 120.491 million to 120.097 million since September 2022. However, the total amount of fees burned decoupled from network activity following Dencun, meaning that the natural increase in supply is outpacing the amount burned in fees. Ether's supply has thus increased by 400,000 tokens since April.
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I'm guessing the governance will vote to fix that ASAP.
 
I posted news about the ETH ETFs in the crypto trading thread recently. Now we're seeing filings being updated:
An S-1 update filed to the U.S. Securities and Exchange Commission early Tuesday showed that Fidelity has rolled back plans to stake ether (ETH) holdings in its proposed spot exchange-traded fund (ETF).

In previous filings, the firm said it intended to “stake a portion of the trust’s assets” to “one or more” infrastructure providers. However, it clearly stated in Tuesday’s update that it would “not stake the ether” stored with the custodian.
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This isn't specific to Ethereum, but has ramifications for Ethereum investment. It is a bit complicated to suss out if you aren't familiar with crypto staking, but essentially, the staking options for ETH are evolving with more competition amongst liquid staking (and re-staking) options. As they develop and compete, investment options for ETH will mature and be more flexible and more rewarding.

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Lido sits at the center of Ethereum's DeFi ecosystem, allowing users to stake cryptocurrency—parking it with the chain to help protect it—in return for rewards. Lido's big innovation when it launched a couple of years ago was that it gave depositors a "liquid staking token" called Lido staked ETH (stETH) that users could trade even as their underlying deposits were technically locked up on Ethereum.

Lido currently ranks as the largest decentralized finance protocol on Ethereum, with $33 billion worth of deposits, according to DefiLlama. StETH, meanwhile, has grown to become one of the most popular assets in DeFi.

But lately, Lido's dominance has fallen as users have moved assets over to EigenLayer, a newer service that allows users to "restake" assets like ether (ETH) and stETH to help secure other networks in exchange for additional rewards.

Lido recently introduced The Lido Alliance—a group of partners and protocols committed to protecting stETH's role in Ethereum DeFi. Lido's head of strategy, Hasu, has also outlined reGOOSE, a multi-pronged strategy to help Lido to address the risks posed to it by restaking.
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www.coindesk.com

Lido Introduces 'Restaking Vaults' in Collaboration with Symbiotic, Mellow Finance

The launch comes after restaking platform EigenLayer started to threaten Lido's dominance in Ethereum DeFi.
www.coindesk.com www.coindesk.com
 
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At Ethereum's Devcon conference in Bangkok on Tuesday, Ethereum Foundation researcher Justin Drake revealed his proposal for a major redesign of Ethereum's consensus layer called "Beam Chain."

Beam Chain is "a proposed redesign of the consensus layer that incorporates all of the latest and greatest ideas from the Ethereum roadmap," Drake said in a speech at Bangkok's Queen Sirikit National Convention Centre.

Drake's Beam Chain vision organizes a series of "big ticket" upgrades to Ethereum's consensus layer into a single package. The changes include adjustments to Ethereum's block production apparatus, as well as how it handles staking and zero-knowledge cryptography.
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www.coindesk.com

Top Ethereum Researcher's Dramatic Proposal Draws Standing-Room-Only Crowd in Bangkok

The Beam Chain groups a number of big-ticket upgrades, including zero-knowledge support and fast finality, into a single Ethereum upgrade.
www.coindesk.com www.coindesk.com

This could be a major development for Ethereum if it comes to pass. The Ethereum network is suffering from inherent limitations that are fueling innovation in competing cryptos like Solana, SUI, MultiversX and others. If they execute a major upgrade to the core network system, they might become more competitive with the newer and better competitors while holding on to their gorilla market cap status.
 
An example of the problem ETH currently faces:

 
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Harz ... argued that Ethereum is losing its status as the leading blockchain for developers and that Pectra alone will not solve the deeper problems the network faces.

The sharp reduction in gas fees is a major improvement for users, but Ethereum’s price decline and technical challenges raise concerns about its long-term position in the market. While the network continues to evolve, its ability to maintain dominance in the crypto space remains uncertain.
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coinmarketcap.com

Ethereum Gas Fees Drop 95% in One Year, but ETH Price Falls 53% Since Dencun Upgrade | CoinMarketCap

Ethereum’s gas fees have dropped by 95% in the year following the Dencun upgrade, significantly reducing transaction costs.
coinmarketcap.com coinmarketcap.com
 
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