Ethereum

when

<figure> 
 <figcaption>
 Cover image via <a href="https://u.today/">U.Today</a>
 </figcaption> 
</figure>
Because based rollups change <a href="https://x.com/adamscochran/status/1833532130879795529">Ethereum's</a> incentive structure, they could significantly increase demand for ETH and change the way the platform is monetized. These rollups give new revenue streams and boost staking value by integrating directly with <a href="https://u.today/ethereum-eth-paints-grim-reversal-pattern-solana-sol-whales-not-bullish-bitcoin-btc-enters-60000">Ethereum</a> validators.
On the Ethereum network, validators currently receive a yield of about 3%. However, validators could earn a lot more money once based rollups are implemented. On top of the money they already make from network inflation, validators who choose to process and validate rollups will receive extra rewards.&nbsp;
<img alt="ETHUSDT" data-entity-type="file" data-entity-uuid="938d4511-38d3-4d38-b2e2-d9bb91405fc8" src="https://u.today/sites/default/files/inline-images/image_1189.png"><a href="https://www.tradingview.com/">ETH/USDT Chart by TradingView</a>
This could lead to yields that are significantly higher than 3% estimates, indicating that as more rollups are added, the yields might even reach 15%. The core business model of the rollups is to pay layer-1 (L1) validators for processing as well as data availability (DA), which fosters a competitive bidding environment and increases validators' value capture.&nbsp;
There will be further increase in demand when some rollups use models, such as proof-of-burn preconfirmation staking or auctions, which all need validators to burn or spend <a href="https://u.today/150-million-in-ethereum-disappear-do-whales-know-something">ETH</a>. This makes staking ETH more appealing, especially since the value gained from staking is not correlated with the quantity of ETH locked anymore.&nbsp;
As more ETH is staked, validators may notice rising yields, which would increase demand and cause a supply shock. This might result in situations where validators continue to profit from rollups and maximal extractable value (MEV) auctions, even in the event that Ethereum's issuance rate drops to zero percent.
We may witness a sizable long-term price increase for <a href="https://u.today/150-million-in-ethereum-disappear-do-whales-know-something">ETH</a> if based rollups are successful in enhancing the modularity and usability of Ethereum's layer-2 (L2) solutions, while lining up financial incentives. Ethereum may be able to reach a $100,000 valuation within the next 10 years, according to some estimates, if these modifications are implemented.

Crucial Ethereum (ETH) Upgrade Can Lead to 100x: Adam Cochran Reveals

U_Today

Other articles published on Sep 11, 2024

Brazil’s Nubank Suspends Trading of its Cryptocurrency Nucoin

FBI Finds Crypto Fraud Losses Hit $5.6B in 2023, Up 45% from 2022

Elon Musk and Tesla Win Legal Battle as Dogecoin Lawsuit is Thrown Out

Indodax Exchange Loses $20.5M in Suspected Lazarus Group Cyberattack

Kamala Harris Dominates Debate with Donald Trump

The balancing act: How global regulatory shapes fintech innovation | Opinion

Join our free newsletter for daily crypto updates!