Thomas🛡️

🧵 Ethereum’s value accrual is misunderstood. Here’s why obsessing over “revenue” is missing the forest for the trees:

1/ Ethereum’s long-term strategy isn’t about maximizing short-term layer 1 revenue.
It’s about becoming the most secure, credibly neutral settlement layer for a global, permissionless economy - just this is incredibly valuable, and Ethereum is winning.

2/ That’s why Ethereum scaling through L2s and blobs intentionally lowers the cost per transaction. This is a feature, not a bug.

3/ Some say L2s should "pay more" to Ethereum (and certainly they could). But here's the issue, higher blob fees give L2s two options:
– Eat the cost (hurts margins)
– Raise fees on users (hurts UX)
None of these are great for early-stage growth.

4/ Ethereum doesn’t want to be a toll booth. It wants to be the internet backbone of the future, where onchain transactions are cheap, fast, and secure.
Just like internet packets, the value comes from volume, not high per-unit fees.

5/ So what is the winning strategy? Adoption.
Not 100x more fees per user. 1000x more users. 100x more use cases. And when blockspace is cheap, this becomes possible. Bring the world onchain!

6/ Cheap fees unlock:
– Microtransactions
– Consumer apps (social, games, payments)
– Emerging markets
– New business models
This is how Ethereum grows organically, not through taxing its ecosystem.  Ethereum is the infinite garden, and it just accelerates its expansion.

7/ Now, critics argue: "ETH price is lagging because L2s aren’t paying enough fees to mainnet." But they’re missing the big picture.

8/ Ethereum isn’t a company. It doesn’t have revenue in the corporate sense. Its transaction and blob fees are:
– Partly burned (deflationary pressure)
– Partly paid to stakers
No central treasury. Just decentralized incentives.

9/ Judging Ethereum’s health by L2 fee contribution is like judging the early internet by how much Yahoo paid for server hosting. It ignores:
– Ecosystem growth (this includes all L2s)
– Developer activity
– Real-world use cases
– Institutional adoption
– Onchain asset growth

10/ And remember what happened with SMS:
In 1995, sending a text cost ~$0.10. By 2010, SMS was almost free.
Volume exploded from 17B in 2000 to 6T+ by 2010.
Lowering costs led to exponential growth and entirely new behaviors (texting culture, chat apps, etc).

11/ Ethereum is following a similar path.
Low costs, reduce friction (UX improvements) → increase usage → unlock new behaviors → accrue long-term value to the Ethereum and $ETH.

12/ And it’s not just about fees. $ETH accrues value in many ways:
– Staking yield: staked ETH earns rewards → utility + reduced sell pressure.
– Deflation: base fees are burned → supply decreases with usage.
– Collateral demand: ETH is economic bandwidth for DeFi, NFTs, DAOs. The fuel of the onchain economy.
– Store of value: ETH is money—a programmable, internet-native asset.

13/ Bottom line: Ethereum is playing the long game.
Revenue matters, but adoption, usability, and ecosystem growth matter more.

The ticker is $ETH.

@l3olanza, @materkel, @ec265, @fockgeorgieboy, @digitalartchick anything to add? Am I missing something?