In the Ethereum community, the buzz surrounding the term “ultrasound money” is met with skepticism by a developer who questions the narrative’s validity. The concept often touts Ethereum’s potential as a deflationary asset with superior tokenomics compared to Bitcoin. While some enthusiasts support this notion, others argue that it relies on overly optimistic assumptions.
Expressing a neutral standpoint, antiprosynthesis.eth, a developer, took to X to challenge the “ultrasound money” narrative. The critique suggests that the term is occasionally veiled in jargon that might obscure the true nature of Ethereum’s monetary policy. According to the developer, the narrative is somewhat exaggerated, laden with what they describe as “pseudo-scientific hocus pocus,” potentially misleading regular users.
Antiprosynthesis.eth emphasizes Ethereum’s monetary policy, designed to achieve sustainability without the risks associated with hyperinflation or excessive deflation. The developer contends that maintaining a balance in token emissions is crucial, a feat achieved by burning a portion of gas fees.
Ethereum’s Sustainable Transformation Through EIP-1559
Following the activation of EIP-1559 in 2021, Ethereum altered its bidding system, introducing a mechanism where the network sets a base fee, subsequently burnt, making the network deflationary or, as some researchers argue, sustainable.
In contrast, Bitcoin continues to issue new coins to miners until the distribution reaches the cap of 21 million BTC. The protocol achieves this through halving mining rewards, with the latest reduction in April bringing rewards per block down to 3.125 BTC.
Analyzing the two approaches, the ETH developer notes the distinct mechanisms each employs to ensure sustainable tokenomics. The developer suggests that the “ultrasound money” narrative championed by ETH supporters might be somewhat exaggerated, providing an overly optimistic assessment of ETH’s deflationary potential.
As of January 10, data from the Ultra Sound Money report indicates that ETH has burned over 3.9 million ETH since the implementation of EIP-1559, while issuing more than 6.9 million during the same period. This underscores Ethereum’s ongoing token burning efforts, resulting in a reduced issuance rate, albeit to a lesser extent than Bitcoin.