Ether Foundation's Justin Drake: ETH Appreciation Comes Down to Traffic and Currency Premiums, which are Crucial to Ether Success

Justin Drake, a member of the Ethernet Foundation, answers the question “Does the EF think it's important for ETH assets to continue to grow in value?” in the AMA. question.

Justin Drake said, “My personal view is that the growth of ETH is critical to the success of EtherFund. I believe that Ether cannot be the settlement layer of the Internet of Value without ETH in fact being the programmable currency of the Internet. Currency premiums only increase with the size of a particular asset (e.g., tens of trillions of dollars). Such monetary premiums are needed to: underwrite trillions of dollars of decentralized stablecoins (“economic bandwidth”), provide unquestionable security, even from nation-states (“economic security”), attract the attention of all major economic players ( “economic salience").”

Additionally, Justin Drake stated, “The value-add of ETH comes down to flows and currency premiums. For traffic, the important metric is the total cost, not the cost per transaction. The successful end of Ether will be 10 million transactions per second, providing billions of dollars in daily revenue even if the cost per transaction is less than a cent. For example, $0.002/tx would provide about $2B/day in revenue. For the cryptocurrency premium, the important metric is the percentage of ETH used as collateral, such as underwriting DeFi.