With Ethereum showing resiliency during the last cryptocurrency winter, ConsenSys founder Joe Lubin says he is “bullish” about the relative stability of Ether (ETH) through compounding macro events.
Cointelegraph Magazine editor Andrew Fenton spoke with Lubin at Web3’s Building Blocks 23 event in Tel Aviv, Israel, for an in-depth interview on the current state and future of the Ethereum ecosystem landscape.
The co-founder of the preeminent blockchain smart contract protocol addressed a number of topics, including the performance of the ETH market over the past year. A myriad of macro events, including the collapse of the Terra/LUNA algorithmic stablecoin and the demise of the FTX cryptocurrency exchange, played their part in what Lubin described as a blow to the ecosystem:
“We do this, as you know, where we get unreasonably exuberant, and then there’s an explosion, higher highs, lower lows.”
Lubin compared the last 12 months to the early 2000s, when the dot-com boom and bust saw the exploration of ‘wild ideas’ fueled by ‘exuberance’ for geopolitical, economic and ecosystem reasons. He thinks the same kind of exuberance may not drive investors in the crypto space in the near future, but he sees potential for more cool projects and ‘tremendous innovation’:
“I think we are in a phase where we have built enough enabling infrastructure. We created scalability, ease of use, and now we can create more useful use cases.”
Despite a difficult year for cryptocurrency markets, Lubin draws positives from the resiliency of the Ethereum ecosystem and the value being gained by “high-profile companies” exploring what can be built within the non-fungible token (NFT) space. ) in particular.
Related: What’s in and what’s out for Ethereum’s Shanghai Update
The ConsenSys founder added that ETH’s ability to hold its value around $1,200 for an extended period while certain ‘CeFi’ players imploded was one reason to be positive for the future of the ecosystem:
“It seems that there were simply no people selling the token at lower prices. And that’s a good thing. I’m optimistic from here.”
The Ethereum merger also played a significant role in the market value of ETH in recent months. Part of Ethereum’s move towards proof-of-stake consensus was the introduction of its fee reduction mechanism, which caused Ethereum to go deflationary for the first time in November 2022.
Lubin also touched on this issue, noting his belief that making ether deflationary was important to ensure that the value of the underlying asset increased over time:
“There is money that you spend to buy a coffee. There is money that you invest. There is money you can lend and borrow. You want your high budget bandwidth money, like ether, to be very fresh and appreciate in value.”
The Ethereum co-founder also said that he was confident that the Ethereum ecosystem would see no further changes to its money supply and that a continued contraction of the monetary base would likely follow.
“I think a slow twitch is reasonable, or at least if it smooths out that we will certainly have ether locked in the protocol and we will have ether locked in other types of voting systems DAO, DeFi, et cetera. I think that’s valuable to the ecosystem.”
Ethereum is now gearing up for the upcoming Shanghai hard fork, of which a major feature will be the enabling of ETH staked on the Beacon Chain and the rewards that users will withdraw. The developers at the Ethereum foundation have been targeting March 2023 as a tentative implementation date.
