Ethereum's World Ledger Positioning: From EIP-1559 to Stablecoin Dominance

Ethereum's positioning as the "world's ledger" is not a new strategy recently proposed; in fact, this shift began as early as the implementation of EIP-1559. Currently, Ethereum's 50% dominance in the stablecoin market further reinforces its role as a financial settlement layer. Let's delve into this evolution process:

EIP-1559: Redefining the Value Capture Mechanism

The core of EIP-1559 lies in reshaping the value capture model of the Ethereum mainnet. It no longer relies on gas consumption driven by increasing transaction volume, but instead shifts to a new method of value capture.

Before EIP-1559, all transactions were concentrated on the mainnet, leading to huge ETH gas consumption, with the average daily burned ETH in 2021 approaching thousands. The mainnet was severely congested, and layer two networks had to participate in gas bidding when submitting batch data, resulting in high and unpredictable costs.

EIP-1559 introduced a predictable base fee mechanism, making the batch submission costs of layer 2 networks on the mainnet stable and controllable. This not only lowers the operational threshold for layer 2 networks but also allows more layer 2 networks to rely solely on Ethereum for final settlement.

This change essentially shifts Ethereum's value capture logic from "consumption-based growth" to "tax-based growth." The second layer network charges fees from users but must regularly submit batches of data to the mainnet and burn ETH, creating a relationship similar to tribute.

This model is similar to the banking system, where local banks handle daily operations, but large interbank settlements must be confirmed through the central bank system. The central bank does not directly serve ordinary users, but all banks must "pay taxes" to the central bank and accept regulation. This is exactly the typical characteristic of the "world ledger" positioning.

Stablecoin: The Market's Vote of Confidence in Ethereum

According to the data, the total market value of global stablecoins exceeds $250 billion, with Ethereum accounting for 50% of the share. This proportion has increased rather than decreased following the implementation of EIP-1559. Why is Ethereum able to attract such capital? The answer lies in its irreplaceable security premium.

Specifically, a well-known stablecoin is anchored at 62.99 billion USD on Ethereum, while another mainstream stablecoin has 38.15 billion USD. In contrast, the total amount of stablecoins on other public chains is relatively insignificant.

The issuer of stablecoins chooses Ethereum not because of its transaction speed or cost advantages, but because of the unparalleled economic security provided by nearly a hundred billion dollars in staked ETH. For institutions managing large assets, this security is a crucial consideration.

The large accumulation of stablecoins on Ethereum has formed a self-reinforcing growth cycle: the larger the scale of stablecoins, the deeper the liquidity, attracting more DeFi protocols to choose Ethereum, thus generating more demand for stablecoins and attracting more capital inflow. This phenomenon is, in fact, a market recognition of Ethereum's "world ledger" positioning by global liquidity through actual actions.

Strategic Positioning of the Ethereum Ecosystem

As the Ethereum mainnet focuses on a "central bank-grade" settlement layer, the strategic positioning of the entire ecosystem has become clearer: various layer two networks are responsible for handling high-frequency trading, while the Ethereum mainnet focuses on final settlement, with clear and efficient division of labor. Each settlement returning from the layer two network to the mainnet will continue to burn ETH, accelerating the deflationary mechanism.

However, this transition has also brought new challenges. The daily average ETH burn rate of the mainnet has significantly decreased, sometimes even falling below a few hundred ETH. Meanwhile, the trading volume and profitability of various major Layer 2 networks are rapidly increasing. This situation has sparked some controversy, with some arguing that Layer 2 networks are "overdrawing" the value of the Ethereum mainnet.

Nevertheless, this issue is not enough to shake Ethereum's status as the world's ledger. The large accumulation of stablecoins, nearly 100 billion dollars in security guarantees, and the largest DeFi ecosystem globally all prove that capital chooses Ethereum for its settlement authority rather than the prosperity of layer two network ecosystems.

The founder of Ethereum seems to have realized this issue and is trying to enhance the mainnet performance to prevent the layer-two network from becoming a developmental obstacle to Ethereum's overall "world ledger" positioning.

Overall, the development status of layer two networks is not directly related to Ethereum's "world ledger" positioning. The current emphasis on the "world ledger" concept seems more like an official confirmation of an established fact. Since the moment EIP-1559 was implemented, Ethereum has already transformed from a "world computer" to a "world central bank."

If we agree that the future dividends of cryptocurrency will come from the deep integration of on-chain DeFi infrastructure and traditional finance, then Ethereum's positioning as the "world central bank" is enough to solidify its status, while the prosperity of layer two networks is not a decisive factor.