ConsenSys founder and Ethereum co-founder Joseph Lubin has implied that Ether (ETH) is transitioning to “ultrasound money” status ahead of the London hard fork slated to activate around 12:30 pm UTC on Thursday.
During an interview with Bloomberg TV, Lubin was questioned on the imminent Ethereum Improvement Proposal (EIP) 1559 upgrade, which will see Ethereum transition away from a bidding-based fee market to a fixed price and burn mechanism.
Lubin stated that the London hard fork is part of a broader global movement, in which the first step is the “democratization of the Earth,” and the second step is the democratization of the decentralized finance system and the introduction of ultrasound money:
“The second step that’s in full play right now is the democratization of the global decentralized finance system. And this step is the introduction of something that people are calling ultrasound money.”
The term “ultrasound money” has been a long-running meme held in Ethereum-based communities, which mocks Bitcoiners who describe Bitcoin (BTC) as “sound money” due to its capped supply of 21 million.
The meme refers to the EIP-1559 proposal’s burn mechanism that could result in Ether’s supply becoming deflationary after more Ether is destroyed than created. Each transaction will burn a base fee, resulting in a decreasing supply of the asset from now on. Some believe that it will give ETH a stronger value proposition than Bitcoin as “ultrasound money.
“So we’re a fixed amount of gold on the planet. And the fixed supply of Bitcoin represents sound money to certain people. With $13 billion worth of Ether locked up in Ethereum 2.0 and $70 billion locked up in decentralized finance, we have enormous demand for the Ether token,” Lubin said.
“And now we’re burning the Ether token with the introduction of the London hard fork,” he added.
Related: DeFi attracts 2.91M Ethereum addresses, according to ConsenSys
ETH seems unlikely to become deflationary soon after the London hard fork, and the upgrade doesn’t ensure this by default. Twitter user Korpi highlighted on Monday that this “doesn’t mean that ETH immediately becomes a deflationary asset. For that to happen, ETH burned must be higher than ETH issued in block rewards.” This is more likely after the move to proof-of-stake.
Bitcoin maxi Peter McCormack appeared unhappy with Lubin’s interview and discussions of ultrasound money, noting on Twitter that:
“Ultra-sound money is a disingenuous use of language. It implies that Ethereum is better money than Bitcoin. While directionally centralizing and operating with a flexible monetary policy.”
Twitter user BobMull12314085 found the funny side, however, stating, “you maxis are so sensitive.”
The Bitcoin community has gotten so pathetic that they actively beg regulators to classify ETH as a security. This has been going on for years.
— eric.eth (@econoar) August 5, 2021
Some examples of many just from today… pic.twitter.com/9I2k96bLma
The London hard fork is a major milestone in the journey to Ethereum 2.0, which will change the network's consensus algorithm from proof-of-work to proof-of-stake.