ConsenSys founder ‘bullish’ on Ethereum after crypto winter performance
With Ethereum showing resilience throughout the past cryptocurrency winter, ConsenSys founder Joe Lubin says he is “bullish” on Ether’s (ETH) relative stability through compounding macro events.
Cointelegraph Magazine editor Andrew Fenton spoke with Lubin at the Web3 event Building Blocks 23 in Tel Aviv, Israel, for an all-encompassing interview on the current state and future of the Ethereum ecosystem landscape.
The co-founder of the prominent smart contract blockchain protocol touched on several topics, including ETH’s market performance over the past year. A myriad of macro events, including the collapse of algorithmic stablecoin TerraUSD (UST) and the demise of cryptocurrency exchange FTX, played their part in what Lubin described as a “blow off top” for the ecosystem:
“We do this thing that you know, where we get irrationally exuberant, and then it’s kind of off the top, higher highs, lower lows.”
Lubin compared the past 12 months to the early 2000s, where the dot-com boom and bust saw “crazy ideas” explored and fueled by the “abundance” of geopolitical, economic and ecosystem reasons. He believes the same kind of exuberance may not drive investors into the crypto space in the near future, but sees potential for more great projects and “tremendous innovation”:
“I think we are in a phase where we have built enough enabling infrastructure. We built scalability, ease of use, and now we can build more useful use cases.”
Despite a tough year for cryptocurrency markets, Lubin takes positives from the resilience of the Ethereum ecosystem and the value being realized by “high-profile companies” exploring what can be built within the non-fungible token (NFT) space.
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The ConsenSys founder added that ETH’s ability to hold its value around $1,200 for an extended period while certain “CeFi” players imploded was reason to be positive for the future of the ecosystem:
“It feels like no one wanted to sell the token at lower prices. And that’s a good thing. I’m bullish from here.”
The Ethereum merger also played an important role in the market value of ETH in recent months. Part of Ethereum’s move to proof-of-stake consensus was the introduction of the fee burning mechanism, which made Ethereum deflationary for the first time in November 2022.
Lubin also touched on this topic, highlighting his belief that making Ether deflationary is important to ensure that the underlying asset increases in value over time:
“It’s money you spend on buying a coffee. It’s money you invest. It is money you can borrow and borrow. You want your money with high economic bandwidth, like Ether, to be very fresh and appreciated.”
The Ethereum co-founder also said that he was confident that the Ethereum ecosystem would not see any further changes in the money supply and that a continuous contraction of the monetary base is likely to continue.
“I think a slow contraction is reasonable, or at least if you smooth out that we absolutely want Ether locked in the protocol and we want Ether locked in other types of DAO voting systems, DeFi, etcetera. I think it’s valuable for the ecosystem .”
Ethereum is now preparing for the Shanghai hard fork, where an important feature will be to activate the staked ETH in the Beacon Chain, with user prices available for withdrawal. Ethereum Foundation developers have targeted March 2023 as a tentative deployment date.
