When it comes to the staking discussion, it's more related to late-2020 price action was very strong after staking unfolded. It was a catalyst that led to price movement.
But staking changed a good bit since liquid staking derivatives meant those tokens were more liquid than the initial batch of staked tokens.
They were semi-liquid.
Eigen proposes to make those LSD tokens less liquid because they will get re-staked. So whether one is stronger than the other, unsure. I almost view Eigen as completing what staking was doing initially in terms of ETH liquidity.. the burn will be a major beta factor as activity begins to spike. But what we also need to consider is more activity is taking place on Ethereum L2s instead of on mainnet. So this burn is sort of offsetting this activity... it's like Ethereum had a massive deflationary event with L2s, so EIP-1559 is creating a reduction in money supply to help create a hint of price stability.
Don't forget the financial innovation that is likely to take place around the risk free rate of ETH. Protocols are sure to try to lure ETH depositors to earn that yield for operations, liquidity, etc.. in exchange for their own tokens.. OR secondary yield markets similar to Treasury markets may materialize. This was a thesis formed several months back by our team that we expect to unfold later this year.
good..!!
glad you liked it! thx for the feedback
Hi Polly, first off, glad to have you back!
When it comes to the staking discussion, it's more related to late-2020 price action was very strong after staking unfolded. It was a catalyst that led to price movement.
But staking changed a good bit since liquid staking derivatives meant those tokens were more liquid than the initial batch of staked tokens.
They were semi-liquid.
Eigen proposes to make those LSD tokens less liquid because they will get re-staked. So whether one is stronger than the other, unsure. I almost view Eigen as completing what staking was doing initially in terms of ETH liquidity.. the burn will be a major beta factor as activity begins to spike. But what we also need to consider is more activity is taking place on Ethereum L2s instead of on mainnet. So this burn is sort of offsetting this activity... it's like Ethereum had a massive deflationary event with L2s, so EIP-1559 is creating a reduction in money supply to help create a hint of price stability.
Don't forget the financial innovation that is likely to take place around the risk free rate of ETH. Protocols are sure to try to lure ETH depositors to earn that yield for operations, liquidity, etc.. in exchange for their own tokens.. OR secondary yield markets similar to Treasury markets may materialize. This was a thesis formed several months back by our team that we expect to unfold later this year.