“With $13 billion worth of Ether locked up in Ethereum 2.0 and $70 billion locked up in decentralized finance, we have enormous demand for the Ether token,” said ConsenSys founder Joe Lubin.
Before the London hard fork, which is set to take place at 12:30 p.m. UTC on Thursday, ConsenSys founder and Ethereum co-creator Joseph Lubin has hinted that Ether (ETH) is shifting to “ultrasound money” status.
Lubin was asked about the upcoming Ethereum Improvement Proposal (EIP) 1559 upgrade, which would see Ethereum switch from a bidding-based fee market to a fixed pricing and burn mechanism, during an interview with Bloomberg TV.
The London hard fork, according to Lubin, is part of a larger global movement in which the first phase is the “democratization of the Earth,” followed by the “democratization of the decentralized finance system” and the introduction of ultrasound money:
“The second step that’s in full play right now is the democratization of the global decentralized finance system. And this step is the introduction of something that people are calling ultrasound money.”
The term “ultrasound money” has been a long-running cliché in Ethereum-based forums, mocking Bitcoiners who refer to Bitcoin (BTC) as “sound money” because of its limited number of 21 million units.
The meme alludes to the EIP-1559 proposal’s burn mechanism, which might cause deflation in Ether’s supply if more Ether is destroyed than created. Each transaction will burn a base fee, resulting in a decrease in the asset’s availability in the future. Some feel it will provide ETH a better value proposition as “ultrasound money” than Bitcoin.
“So we’re a fixed amount of gold on the planet. And the fixed supply of Bitcoin represents sound money to certain people. With $13 billion worth of Ether locked up in Ethereum 2.0 and $70 billion locked up in decentralized finance, we have enormous demand for the Ether token,” Lubin said.
“And now we’re burning the Ether token with the introduction of the London hard fork,” he added.
It’s unlikely that ETH would become deflationary soon after the London hard fork, and the upgrade doesn’t guarantee it. On Monday, Twitter user Korpi pointed out that this “doesn’t mean that ETH becomes a deflationary asset immediately.” For it to happen, the amount of ETH burned must be greater than the amount of ETH issued in block rewards.” After the switch to proof-of-stake, this is more likely.
Bitcoin’s maximum value Peter McCormack expressed his displeasure with Lubin’s interview and comments about ultrasound money on Twitter, writing:
“Ultra-sound money is a disingenuous use of language. It implies that Ethereum is better money than Bitcoin. While directionally centralizing and operating with a flexible monetary policy.”
Twitter user BobMull12314085 found the funny side, however, stating, “you maxis are so sensitive.”
The Bitcoin community has gotten so pathetic that they actively beg regulators to classify ETH as a security. This has been going on for years.— eric.eth (@econoar) August 5, 2021
Some examples of many just from today… pic.twitter.com/9I2k96bLma
The hard fork in London is a significant step toward Ethereum 2.0, which will switch the network’s consensus process from proof-of-work to proof-of-stake.