EIP-1559: Ethereum from "World Computer" to "World Central Bank"

Author:Haotian

Many people regard Vitalik Buterin's emphasis on Ethereum as the "world ledger" as a new strategic adjustment, but in fact, this transformation was completed the moment EIP-1559 was launched. The 50% exclusive share of stablecoins on Ethereum only strengthens the positioning of Ethereum as a financial settlement layer. Let me explain in detail:

1) The core of EIP-1559 is not to reduce the gas fee, but to redefine the value capture mechanism of the Ethereum mainnet and establish a new model in which Ethereum no longer captures value by increasing gas consumption due to transaction volume.

Previously, all transactions (DeFi, NFT, GameFi, etc.) were crowded on the mainnet, which would lead to a large consumption of ETH Gas. According to data, the average daily burn of ETH in 2021 was nearly several thousand. At that time, the Ethereum mainnet was also congested, and Layer2 had to join the Gas War when submitting batch data verification on the mainnet, which was costly and unpredictable.

But EIP-1559 changed the rules of the game: after introducing a predictable Base fee mechanism, the batch submission cost of Layer2 on the mainnet became stable and controllable. This directly lowered the operating threshold of Layer2, allowing more Layer2 to rely solely on Ethereum for final settlement.

On the surface, EIP-1559 facilitates Layer2, but in fact it has profoundly transformed Ethereum's value capture logic: from "consumption-based growth" that relies on high-frequency transactions on the main network to "tax-based growth" that relies on Layer2 settlement needs.

Think about it, before, users paid directly to the Ethereum mainnet in exchange for computing services, which was a buying and selling relationship. Now Layer2 earns transaction fees from users, but must regularly "submit" batches of data to the mainnet and burn ETH, which has become a tribute relationship.

This is very similar to how banks in various places handle their daily business, but large-scale inter-bank settlements must be confirmed by 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 supervision.

This is a typical example of the positioning of the "world ledger".

2) According to DeFiLlama data, the total market value of global stablecoins currently exceeds US$250 billion, with Ethereum accounting for 50% of the market share. This proportion has increased instead of decreased after the launch of EIP-1559. Why is Ethereum so attractive to capital? The answer is actually very simple: irreplaceable security premium.

Specifically, USDT has deposited 62.99 billion US dollars on Ethereum, and USDC has 38.15 billion US dollars. In comparison, the total amount of stablecoins on Solana is only 10.7 billion US dollars, and BNB Chain is only 10.4 billion US dollars. The two combined are less than a fraction of Ethereum.

The question is, why do stablecoin issuers choose Ethereum?

It is definitely not because it is cheap or fast, but simply because the economic security provided by the nearly $100 billion in ETH staking is unmatched. The cost of attacking Ethereum is ridiculously high, which is a very important consideration for institutions that manage $100 billion in assets.

With the huge amount of stablecoin funds deposited, the Ethereum ecosystem has formed a self-reinforcing growth flywheel effect:

The more stablecoins there are → the deeper the liquidity → more DeFi protocols choose Ethereum → more stablecoin demand is generated → more capital inflows are attracted.

From this perspective, the fact that stablecoins can gather on a large scale on Ethereum is actually the result of global liquidity voting with its feet, and is also a market confirmation of its positioning as a world ledger.

3) When the Ethereum mainnet focuses on being a "central bank"-level settlement layer, the strategic positioning of the entire Ethereum ecosystem is very clear: Base, Arbitrum, and Optimism are responsible for high-frequency trading, and the Ethereum mainnet is focused on final settlement, with clear and efficient division of labor. And every settlement from Layer2 back to the mainnet will continue to burn ETH, making this deflationary flywheel turn faster and faster.

You see, many E guards will be heartbroken when it comes to this. In this case, why does layer2 not contribute to the deflation of the Ethereum mainnet, but instead becomes a "vampire" that overdraws the value of the Ethereum mainnet?

The actual data is very cruel: the original grand occasion of Ethereum mainnet burning thousands of ETH per day no longer exists. What about now? The daily average burn volume has shrunk significantly, sometimes even less than a few hundred ETH. At the same time, Arbitrum processes millions of transactions per day, Base has become a super profit machine with the help of Coinbase's traffic, and Optimism has also made a lot of money.

What is the problem? All users have gone to Layer2, and the main network has become an "empty city". Layer2 collects millions of dollars in handling fees every day, but the "protection fee" given to the main network is pitifully small.

However, this problem cannot shake the established position of Ethereum as the world’s ledger. The massive accumulation of stablecoins, the security of nearly $100 billion (28% of the supply is pledged), and the world’s largest DeFi ecosystem all prove that capital chooses Ethereum’s settlement authority rather than the transaction prosperity of the layer2 ecosystem.

Today, Vitalik Buterin seems to be aware of this problem and is trying to improve the performance of Ethereum's main network again, because he does not want layer2 to become a burden on the development of Ethereum's overall world ledger positioning.

But in the final analysis, the success or failure of layer2 has nothing to do with the positioning of Ethereum's world ledger.

Vitalik's emphasis on the "world ledger" now is more like an official confirmation of a fait accompli. EIP-1559 is that historic turning point. From that moment on, Ethereum is no longer a "world computer" but a "world central bank."

In other words, if you agree that the next Crypto dividend is the integration of on-chain DeFi infrastructure and TradiFi traditional finance, then Ethereum’s positioning as the “world’s central bank” is enough to consolidate its position, and whether layer2 is prosperous or not is not important at all.

Of course, if you still think that Ethereum must wait for the layer2 ecosystem to become strong before it can rise, you can ignore this analysis and pretend I didn’t say anything.