The People's Network - The Daily Gwei #365
All are welcome on Ethereum.
The Ethereum network is home to many different types of applications - some of them world-changing, some of them scams, and some of them sit dubiously in the middle. Though, given that Ethereum is a decentralized and permissionless network, all applications and users are treated equally - for better or worse.
As you can see above, one of the top burners of ETH over the last 30 days has been SHIB - a popular “dog coin” that has attracted a lot of attention due to rapidly increasing in price over the last few weeks. I don’t like to moralize about what is and isn’t a “valuable” use of Ethereum blockspace but the beauty of EIP-1559 is that no matter what you think of SHIB and other such tokens, they are a net positive for ETH holders since all on-chain transfers of SHIB incur a gas fee - most of which is burned. This goes back to the symbiotic relationship that I wrote about in June of 2020 - all transactions on the Ethereum network now pay their dues in burnt ETH instead of free-riding on the network.
Though in saying that, there is still a negative consequence of things like actual scam tokens or just useless things living on Ethereum as they tend to “bloat” the state which makes it more difficult to sync and run full nodes. This should be rectified once stateless Ethereum is implemented though this is still a while away and may not happen until after sharding. But even in this case, Ethereum is still living up to what it promises its users - a decentralized and permissionless network to do whatever you want on as the network itself has no morals or preferences - it simply executes any and all valid transactions as it receives them.
The argument could also be made that a lot of this activity that many deem to be “useless” is actually a net positive for the Ethereum ecosystem as an onboarding tool. Think about it - how many new people make an Ethereum wallet just to participate in buying tokens that people think are worthless/scams/pure memes - it’s probably at least tens of thousands if I had to guess. Most of these people probably won’t go beyond speculating on these random tokens, but some of them will dig deeper and inevitably get more involved with other parts of Ethereum. So from this view, you can look at these things as a “marketing funnel” for Ethereum that has a net-positive effect for the entire ecosystem.
We’re probably going to see countless more of these meme tokens and low-effort NFT drops as time goes on - it’s just what happens when there’s easy money to be made. Though if you start looking at these things within the context that I’ve outlined above, you can begin to see how they are actually a net-positive for the Ethereum ecosystem. Of course, people will lose money chasing these things, but the fact that Ethereum is still fulfilling its promise of decentralization and permissionlessness after 6+ years of operation is something we should all be very happy about.
After all, if we start policing what can and can’t be done on the Ethereum network, we become no better than the systems we are trying to disrupt.
Have a great day everyone,
Anthony Sassano
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All information presented above is for educational purposes only and should not be taken as investment advice.