Let no good deed go unpunished, as Mark Twain colorfully remarked (do kids know who Mark Twain is these days?). The sentiment can be seen in the back and forth happening across the social media. I’ve observed quite a few rejoicing following the smooth London Hard Fork upgrade and excitedly watching Ethereum tokens get burned on sites like EthBurned.info.

But not so much for everyone:

Gas fee’s are falling back into focus as many have already seen exponential uplifts. Could this just be an artifact of increased volumes just prior to and following the upgrade? Remains to be seen, but there are countless posts of higher gas fees, along with negative sentiment directed towards the London Hard Fork.

What these folks don’t realize is that the net effect of EIP-1559 effectively incentivizes people to hold Ethereum. The burned tokens are also being redirected from miners. It’s a clever way to set up the new proof-of-stake network and push more traditional miners into that segment. It’s highly doubtful Bitcoin will ever follow this kind of a model. After all, there is a hard cap on the number of coins that will ever be produced.

In less than a day, we’ve burned 5,700 ETH translating to a value of $16MM. Can you imagine what will happen if this rate continues? $160MM in 10 days, half a billion dollars in a month? This translates to about 2% a year back to holders of Ethereum!

Don’t think of this as a dividend. I’ve seen that analogy, but it falls short of what’s really going on. For me, it’s taking the form of a wall street share repurchase program. The value of your shares will go up as a consequence.

If this is the direction we are headed, will the major crypto projects take the lead from wall street on how to step into the next phase of growth?
Can we see actual M&A (mergers & acquisitions) happening on the blockchain?

Sounds wild, but can you imagine new tokens of ETH issued to acquire other chains and integrate them into the platform, just like a wall street all-stock acquisition? There are so many projects with real use cases this cycle that we may start to see consolidation rather than orphaned projects, as was the case 4 years ago.

All of you have to do is look at the 1999/2000 dot com bust, and compare it to what happened post-2009 in the tech sector. The Nasdaq has gone from under 2K to just below 15k today. Wall Street looks at that as a moonshot, just imagine what consolidation will look like in the crypto space. You’ll be issued 0.05 ETH, for every token of project X that you hold? Might seem unbelievable, but it’s a natural progression and evolution that we could start to see.
So where do we go from here? If we can hold current levels, I don’t see anything in the way until 3,200. Just my opinion, not financial advice.

 

UPDATE: AUGUST 15, 2021

Only seven days later and we have our first M&A activity in the blockchain space. Polygon acquires the first chain to unify tokens into its community.

 

#Beast#

Aquisition EIP1559 Merger Token Burn wall street