United States investment bank Goldman Sachs Plans to Offer Ethereum (ETH) Derivative Products
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Ryan Berckmans, an Ethereum developer that has been updating the community about the importance of Ethereum Improvement Proposals has recently shown that the much-awaited upgrades to the Ethereum network, EIP-1559, and proof-of-stake (PoS) consensus protocols are yet to price into ETH.

In a series of tweets on 20th March 2021, Berckmans stated that Ethereum is about to pay miners $18 billion this year, but next year, they will receive $0. He added that this money will rather be accrued for ETH holders after the upgrades.

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Ryan Berckmans noted:

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“Are the benefits of EIP-1559 and proof of stake already priced into ETH? imo, definitely not Ethereum is on track to pay miners $18b this year. Next year it’ll be $0. I see no evidence in the history of the crypto market or current activity to suggest this is already priced in.

“For example, yesterday, ethereum paid $51M to miners and accrued $0 to ETH holders. With EIP-1559 and proof of stake, we’d have paid $0 to miners and accrued $25.5M to ETH holders (in one day). Here’s how the ETH cash machine works.”

The Price of Ethereum (ETH) Is Below the Value of Cash It Produces

According to Berckmans in a thread of tweets on 1st March, Ethereum (ETH) is currently undervalued considering the value of the cash it produces.

He said ETH should currently worth around $2850 if not for the exorbitant fees that are paid to miners periodically:

“ETH the cash machine. Ethereum’s fees are worth ETH at $2850. The price of ETH is below the value of the cash it produces because ethereum’s fees go entirely to miners, who are on track to be paid 8% of all ETH this year.”

How EIP-1559 Benefits Ethereum Network

The Ethereum developer went further to explain how the much-awaited Ethereum Improvement Proposal (EIP) 1559 would transform the network.

Read Also: Ryan Watkins of Messari: Ethereum Would Replace Bitcoin As Go-to Asset after ETH 2.0 Is Rolled Out

Ryan Berckmans tweeted, “With EIP-1559, each transaction no longer picks a gas price. Instead, each transaction picks two new numbers, the “fee cap” and “tip”. Here’s a concept for how a wallet might auto-calc the fee cap and tip, and then show the user a fee choice of Slow, Average, or Fast, like today.”

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Tobi Loba

By Tobi Loba

Tobi-Loba is a creative and an award-winning writer with over 5 million readers from all over the world. She has B.A in English and Literature from a reputable University and currently studying for her M.A in the same field. She recently became a contributor at Herald Sheets in order to satisfy her thirst in reporting crypto and blockchain occurrences, the interest she built over the years.