Ethereum's latest internal meeting: Dencun mainnet activation may not take place this year due to the failure of Holesky startup affecting the process.

The key node is to release Dencun on the public testnet at the Ethereum Developer Conference in November.

Simply put, it is still uncertain whether Dencun (Cancun Upgrade) will be postponed. The key lies in whether it can be put on the public testnet before the Ethereum Developer Conference in November.

I expect that postponement is a high probability event, which can be seen from the current decadent trend of mainstream L2 projects such as $OP, $ARB, and $METIS.

Although the Cancun upgrade will be postponed, the L2 war is still very fierce, and some new L2 forces have recently joined.

1. Eclipse launched the Eclipse mainnet, which is L2 on Ethereum. The highlight is that it completes transactions on the Ethereum settlement layer and executes smart contracts through the Solana Virtual Machine (SVM).

With parallel transaction processing capabilities, Eclipse performs 10x faster than competitors such as Optimism. There are plans to launch a governance token in the future.

2. The Cosmos-based Canto public chain plans to become L2 on Ethereum to focus on real-world assets. It seems that it will take advantage of the RWA craze.

3. Astar, the leading parachain on Polkadot, is ready to expand to Ethereum and launch Astar zkEVM. Astar is also currently the leader in large-scale adoption of Web3 in Japan.

The development of Canto and Astar zkEVM both utilized Polygon’s development kit (Polygon CDK).

Using Polygon CDK, it is easy to launch a chain (new zk chain) with one click, which is somewhat similar to the super chain of OP Stack in function.

As the leading players in major public chain ecosystems begin to expand or migrate to Ethereum to grab a piece of the huge L2 market, it can be foreseen that the highlight of the next bull market will be the L2 war.

As the market continues to be sluggish recently, $ETH has begun to inflate. There is deflation in a bull market and inflation in a bear market. This inflationary state has actually been going on for a while.

This is not the reason for the decline, but just a reflection of the on-chain activity. In short, there are no projects such as Golden Dog on the Ethereum chain.

With extremely low gas fees, demand is severely insufficient, and relying solely on Uniswap transaction fees and USDT handling fees is not a long-term solution.

New sustainable demand must be generated to reverse the situation and return to the path of sustained deflation. For example, the upcoming L2 protocol war will stimulate development and perhaps generate new narrative demand.

The $ETH burning data for the past 30 days is collated:

Supply increased by 14,800 $ETH, primarily due to current gas markets hovering at extremely low  (6 Gwei), well below the average since the merge (26 Gwei).

The DeFi sector remains the largest burner, with declining on-chain activity resulting in only 51,790 $ETH destroyed in the past month (relative to 66,600 $ETH issuance).

- Uniswap = ~22% burn (11,700 ETH)

- L2 like StarkWareLtd & zksync = ~6% (3300 ETH)

- Stablecoins (USDT) = ~4% (2100 ETH)

This reflects that DeFi still occupies a dominant position in the ETH ecosystem.

What will happen if $ETH winter continues into 2024.

Assume average Gas remains low at around 20 Gwei and that 27M $ETH is staked (this is the amount of ETH that has been staked).

$ETH supply is expected to increase slightly from 120.22M to 120.30M, with 400 ETH remaining in daily issuance (2400 ETH issued VS 2000 ETH destroyed).

In order to achieve a balance between burning and issuance, the network needs to reach an average gas price of about 24-25 Gwei to prevent inflation and achieve a deflationary path.

Regardless, $ETH is still the "super sound money" I know of, with 291.94K $ETH burned since the merge and supply still at -0.236%/yr.

As long as the ecological activities on $ETH pick up in the future, it is expected to reach a new historical high.

So in my own investment portfolio, ETH will account for a large part of the investment, mainly considering two key points:

1. The annual inflation rate is very low and has limited downside potential.

2. The prototype of the ETH ecosystem has already emerged with a strong moat. As the global settlement layer, countless powerful and useful applications will surely emerge in this ecosystem in the future.

Finish.

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