Developer Thinks Ethereum's “Ultrasonic Money” Narrative Is Exaggerated: Is It?

The term “ultrasonic money” has been used quite a bit in the ethereum (eth) community, often describing the network's potential to become a deflationary asset with better token economics than bitcoin (btc). While some advocates believe this narrative is well-founded, others argue that it is exaggerated and based on overly optimistic assumptions.

Is ethereum's “ultrasonic money” narrative overblown?

In a post on X, antiprosíntesis.eth, a developer, challenged the “ultrasonic money” narrative, arguing that it is often accompanied by jargon that can obscure the reality of ethereum's monetary policy. Specifically, the analyst believes the narrative is a bit “exaggerated” and loaded with “a bunch of pseudoscientific tricks” that could mislead ordinary users.

By taking a neutral view, antiprosynthesis.eth, ethereum's monetary policy is, most importantly, designed to be sustainable without the dangers of hyperinflation or excessive deflation. The developer maintains that achieving a balance in symbolic emissions is essential.

In the case of ethereum, this is achieved by burning a portion of the gas fees. Following the activation of EIP-1559 in 2021, the first smart contract platform changed its bidding system, creating a system in which the network sets a base rate with the possibility for a user to “tip” the validator. The base rate is burned, helping the network become deflationary or, as researchers argue, sustainable.

In the case of bitcoin, the network will continue issuing new coins to miners until all 21 million btc are distributed. This will be more than a decade from now. To achieve this, the bitcoin protocol has been halving mining rewards. In the early years of bitcoin, miners received 50 btc every time they confirmed a block of transactions. However, after the network halving in April, miner rewards per block will drop to 3,125 btc.

The path to sustainability, ethereum issuance rate continues to fall

Comparing the two approaches, the ethereum developer points out that each system has its mechanism to ensure its tokenomics is sustainable. The analyst adds that the “ultrasonic money” narrative advocated by its supporters may be exaggerated and, to some extent, an overly optimistic assessment of eth's ability to be deflationary.

As of January 10, ethereum has destroyed over 3.9 million eth since the implementation of EIP-1559 based on Ultra Sound Money. data. During this time, the network aired more than 6.9 million.

This confirms that ethereum has been burning more eth recently; it is still inflationary, to a lesser extent, like bitcoin. Still, unlike bitcoin, ethereum's issuance rate has been steadily falling due to increased token burning.

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