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ETH Rise: The Scarcity and Growth Potential of On-Chain Economic New Reserve Assets
From Misunderstood to Rising: How ETH Became the Reserve Asset of the On-Chain Economy
Ethereum ( ETH ) is transforming from a misunderstood asset into a scarce, programmable reserve asset in the on-chain ecosystem. It provides security and momentum for rapidly compliant blockchain networks.
The adaptive monetary policy of ETH is expected to lead to a continuous decline in the inflation rate. Even if 100% of ETH is staked, the inflation rate will be a maximum of about 1.52%, dropping to around 0.89% by 2125. This is far lower than the annual M2 supply growth rate of 6.36% for the US dollar, and it may even rival the supply growth rate of gold.
Institution adoption is accelerating. Companies like JPMorgan and BlackRock are building applications on Ethereum, driving continuous demand for ETH to ensure the security and settlement of on-chain value.
The growth of on-chain assets shows a high correlation with native ETH staking, highlighting strong economic consistency. The recent staking policy statement released by the U.S. SEC has reduced regulatory uncertainty. The Ethereum ETF application documents now include staking provisions, enhancing returns and strengthening institutional consistency.
The deep composability of ETH makes it a productive asset. It can be used for staking/re-staking, as DeFi collateral, AMM liquidity, and as a native gas token for Layer 2.
Although Solana has gained attention in the Memecoin activities, Ethereum's stronger decentralization and security enable it to dominate the issuance of high-value assets, which is a larger and more enduring market.
The rise of Ethereum reserve asset strategies has led to publicly traded companies holding over 730,000 ETH. This new demand trend is similar to the Bitcoin reserve asset wave in 2020 and has driven ETH to outperform BTC recently.
ETH is gradually establishing itself as a scarce reserve asset in the on-chain economy, providing security, settlement, and functional support for the increasingly institutionalized blockchain financial ecosystem.