Oddbean new post about | logout
▲ ▼
sradic | 2 months ago (raw) | root | parent | reply | flag +2 
 It has another problem now. With activities migrating to l2s, the native token of the base layer has no clear use case. It isn't exactly money, and with dwindling activity on the l1 it isn't in particular demand as digital oil either. Add in that there is no staking yield if you buy it through the ETF and you have a problem on the demand side.
▲ ▼
Joemama | 2 months ago (raw) | root | parent | reply | flag 
 L2 efficiency goes up, ETH burn rate decreases, demand for ETH decreases.
ETH burn rate  and demand decreasing leads to inflation rate of ETH increasing, price of ETH decreasing, L2 costs decreasing reducing incentive to make L2s more efficient. 
L2s increase ETH consumption again until their costs are prohibitive enough to be worthwhile running efficiently. 
And the loop continues…