"A peer-to-peer electronic cash."

Satoshi chose this phrase to encapsulate Bitcoin, distilling a collection of distributed system advancements into a concise summary. The pitch was socially refined further, eventually emerging “digital gold”, a metaphor that more succinctly reflects the behavior surrounding Bitcoin’s usage.  Bitcoin’s simplicity lends to the minimalism of its narratives:  a scarce rock with no functionality. It’s like gold, but it’s digital.  When describing Bitcoin, there isn’t even a need to differentiate between the asset and the protocol.

“A next-generation smart contract and decentralized application platform”.

Vitalik chose this phrase to embody Ethereum’s more ambitious objective and this fully loaded definition reflects it. Precious metal analogies won’t suffice. Using Ethereum requires an understanding of its two distinct components: 

• Ethereum is a world computer, a trust machine, a global, permissionless computer capable of making strong commitments and empowering radical markets.

• ETH is ether, gas, a usable commodity like oil, a triple point asset, it’s programmable, ultrasound money. 

Over the years, these expressions have borrowed from various analogies to capture the fundamental essence of Ethereum and ETH. Much like Vitalik’s original description, these phrases still require additional unpacking compared to Bitcoin’s “digital gold” meme. 

Explaining our memes to a normie friend usually starts like this:

“Bitcoin is disinflationary, so if BTC is sound money, Ethereum’s often deflationary issuance makes ETH ultrasound money. You see, the fee burning mechanism introduced by EIP-1559...”

To the right audience, these are still powerful memetic devices. To the wrong audience, they are additional layers of complexity and mysticism.  As a fellow ultrasound enjoyer, I recognize the 🦇🔊 meme works for me, but not everyone.

The phrase “ETH is money” has existed in crypto Twitter’s lexicon for many years, but the phrase has seen increased usage over the last 6 months:

RYAN SΞAN ADAMS - rsa.eth 🦄

@RyanSAdams

ETH is money.

The Ethereum economy with its tokens & defi & L2s will someday measure in the hundreds of trillions.

Across this vast economy there be only one asset with the deepest liquidity & settlement assurances - a censorship resistant store of value.

Money is ETH.

593

11:17 AM • Sep 12, 2024

mikeneuder.eth ⟠

@mikeneuder

hope everyone is recovering post-DEVCON! it was a pleasure to present "ETH is permissionless money" and progressively build out the points in this diagram.

---
quick highlight-reel thread below ↓↓↓
---
video: youtube.com/watch?v=qdCUbO…
slides: github.com/michaelneuder/…

237

7:06 AM • Nov 21, 2024

sassal.eth/acc 🦇🔊

@sassal0x

Ethereum is the world computer.

ETH is money.

678

4:03 PM • Dec 3, 2024

ETH is money.  It’s simple, it’s concise. It communicates ETH’s value proposition in a single word: “money”. On its own, “ETH is money” does not articulate the full story, but it doesn’t need to. Additional nuance can easily be layered on top. “ETH is money” is inherently modular:

ETH is [___] money.  Fill in the blank: Programmable, ICO, DeFi, NFT, Internet, AI, Web3, L2.

The simplicity of this format even leaves room for our more nuanced memes, like ETH is ultrasound money.

“ETH is money” is an objective description of how it’s used today.

• The Ethereum network settles about 1.3 million native transactions daily. ETH is money that pays for economic inclusion.  

• Layer 2 networks add an additional 19.7 million transactions per day. ETH is money that pays for economic security.

  

• Since EIP-1559, three and a half years ago, ETH transfers are by far the largest single source of burn, more than every other exchange and asset.   ETH is money, a global medium of exchange.

• 34 million ETH is staked today, earning interest in exchange for securing the network. ETH is money with native yield.

• The current L1+L2 stablecoin market cap is $120 billion. ETH is money that moves other monies more efficiently.

• Layer 2 networks export about 4.2 million ETH ($15.3 billion today) from the L1 to be used as a high-quality liquid asset. ETH is money in DeFi.

  

• The Ethereum network locks $70 billion in DeFi across hundreds of assets and protocols, more value than all other blockchain networks combined . ETH is money with the strongest network effects and access to liquidity. 

ETH is money because it has to be. Within the meme lies recognition that the health of a blockchain is rooted in the monetary premium of its asset. Network security is tied directly to the money-ness of its token. Bitcoin sheds half of its new monetary issuance, and therefore, half of its security budget every four years. To incentivize validators to secure the network while retaining its 21M supply cap, Bitcoin MUST eventually replace issuance rewards with orders of magnitude increases to demand, transaction fees, and market cap.  It remains to be seen if this is even economically possible, but one thing is certain:

The future of Bitcoin depends on it becoming money.

Fortunately, Ethereum integrated these lessons into its monetary policy, achieving sustainability of its security budget and its monetary issuance. Ethereum pays far less for security and is still capable of ending the day with less circulating supply than it started.  Ethereum can secure its cake and eat it too because ETH is money.

Finally, “ETH is money” is a Schelling point for coordination and community engagement. ETH is Money is the name of a new collective formulated at Devcon SEA ‘24. The goal: champion, educate, and spread the ETH is Money meme.

Today, in the year 2025, the third largest crypto asset by market cap is ...Ripple.  Opening Coingecko is a recurring reminder that this market is still wildly, dangerously uneducated.  

ETH is Money is a set of live dashboards, metrics, and educational tools that clearly articulate the money-ness of ETH. At a time when crypto Twitter is convinced that ETH needs a stronger memetic presence, ETH is Money emerges as a growing collective response.

Kev.Ξth (🍄,🟢)

@owocki

the world if $ETH holders stepped up to do themselves what they say the EF should do.

248

3:00 PM • Jan 4, 2025

Join the first community call Wednesday, Jan 15th, and follow along.

The next time you’re explaining ETH to a normie friend, see if ETH is money is right for you. Try something like:

ETH is money for the Ethereum economy, the largest and most widely adopted internet-native economy. Like traditional money, ETH can be lent, borrowed, traded, invested, spent, and held while earning interest. Unlike traditional money (and Bitcoin), you can do these things without relying on any custodians or intermediaries. While Bitcoin originally set out to become a peer-to-peer electronic cash, ETH actually achieved it.

Follow for more posts like this.

Universal Synchronous Composability

Today’s Ethereum user is still technically sophisticated with a high tolerance for complexity and pain.  Users are forced to keep track of which applications support which networks and where their assets live. If they must migrate funds, there are many bridging options with various security considerations.

To maximize application support, users are encouraged to spread funds and account state across dozens of L2s, fracturing their liquidity, juggling painful UX, and incurring fees with every step.

Universal Synchronous Composability (USC) is not one specific improvement, but a broader vision for abstracting away much of today's complexity. USC seeks to combine the economic security of the L1 with the scalability of L2s, bundled together with the user experience of a single network. Phrased another way, USC takes Ethereum’s modular, rollup-centric design and re-introduces the desirable UX of a monolithic chain.

• USC is universal in that it connects Ethereum and all of its rollups, enabling multi-chain transactions. A user is no longer required to select a specific L2 on which to transact, they connect to Ethereum and the rest fades away.

• USC is synchronous in that these multi-chain transactions are settled atomically, updating a user’s state across many networks simultaneously via a single intent. Bridging becomes mostly unnecessary, the protocol and application layers meet the user’s assets where they are.

• USC is composable in that interoperable protocols are free to connect, combine, and call functions in contracts across all networks. Fractured liquidity becomes shared and accessible.

UX benefits aside, USC leads us toward a more positive-sum ecosystem. L2s must no longer compete with the L1 over liquidity or user state. New L2s must no longer cannibalize the network effects of existing rollups. USC allows us to ride Metcalfe’s law toward a more valuable, cooperative ecosystem while retaining a diverse plurality of EVMs. [3]

So how might we achieve this?

He who controls the sequence, controls the rollup.

- me

Today’s rollup sequencers are centralized, monopolize L2 MEV, and are capable of censorship. The first major step toward USC is to replace this process with a more decentralized design.

How do we ensure L2 transactions retain the same security, censorship resistance, and liveness guarantees as the L1? Two major solution categories have emerged.

A shared sequencer is a rollup-agnostic abstraction. In practice, this looks like a Layer 1 validator network tasked with sequencing transactions not for itself, but for other L2s. These L2s communicate with the sequencer network via JSON-RPCs while sequencers communicate internally via peer-to-peer messages. The design is familiar, some utilizing the same BFT consensus algorithms that have existed for years. [5]

Shared sequencing is the first step, but bootstrapping a new L1, even via restaking, isn't ideal. Worse, some designs might only enable cross-L2 multi-chain transactions. A more USC-friendly solution would be one in which the existing Ethereum validator set could get ETH L1 slots in on the action.

Based sequencing is a shared sequencing design based entirely on the Ethereum L1. Rollups already rely on Ethereum for settlement and data availability, so shared sequencing would be a logical new service offering.

L1 block proposers could opt into becoming a “sequencer” offering preconfirmations, assurances promising transaction inclusion in a specific L2 slot of a based rollup (ex: 🔢 is pictured above). A preceding, non-sequencing proposer, or “includer”, is then free to settle the sequenced L2 transactions in an earlier L1 slot (ex: ⤵ pictured above), but the user has economic assurance of their specific L2 slot inclusion and L1 settlement by the sequencer’s slot. Should the sequencer fail to include and settle the transaction in the promised slot, they incur a slashing penalty against additional posted collateral. The sequencer is therefore incentivized to only make preconfirms they expect preceding includers to accept. [4]

This approach is functionally very similar to Execution Tickets [6] but designed for the L1 <> L2 interoperability necessary for USC.

Real-time settlement is the other necessary USC dependency. Optimistic rollups rely on fraud proofs and zk-rollups rely on SNARK or STARK proofs to achieve finality. These proofs are computationally intense and very slow to produce today, taking minutes or even hours. If proof generation could be reduced to <12 seconds, L2 transactions could theoretically be settled within a single L1 block.

Proof latency < slot time is the dream.

Today, almost a dozen teams are researching SNARK proving ASICs capable of such orders of magnitude latency reduction. Some have already manufactured prototypes, making this dream a near-term reality! [7]

Justin Ðrake 🦇🔊

@drakefjustin

The first ever SNARK proving ASIC

Real-time proving, real-time settlement, universal synchronous composability—coming sooner than most think :)

We can fix Ethereum fragmentation!

2,083

4:20 AM • Feb 9, 2024

With based sequencing offering better composability and real-time settlement reducing latency, a proposer could include transactions making function calls between L1 and L2 applications and include them atomically. These improvements enable instantly settled, multi-chain transactions:

The full vision of Universal Synchronous Composability is at least another full market cycle away, but you can take comfort in knowing the nostalgic, simple UX of DeFi Summer may someday return to an Ethereum node near you. To learn more about these tracks of work, follow the EF’s ongoing Ethereum Sequencing and Preconfirms call series [8].

[1] V. Buterin, "A rollup-centric ethereum roadmap," Fellowship of Ethereum Magicians. [Online]. Available: https://ethereum-magicians.org/t/a-rollup-centric-ethereum-roadmap/4698. [Accessed: May 19, 2024].

[2] CoinGecko, "Top Bridged USDC Coins by Market Cap," [Online]. Available: https://www.coingecko.com/en/categories/bridged-usdc. Accessed: May 19, 2024.

[3] Bankless, "Fixing Fragmentation with Justin Drake," YouTube, Feb. 5, 2024. [Online]. Available: https://www.youtube.com/watch?v=MnsjUZo7RRI.  [Accessed: May 19, 2024].

[4] J. Drake, "Ethereum Sequencing," presented at the Ethereum Sequencing and Preconfirms: Call series, Ethereum Foundation, Feb. 16, 2024. [Online]. Available: https://docs.google.com/presentation/d/1v429N4jdikMIWWkcVwfjMlV2LlOXSawFCMKoBnZVDNU/edit#slide=id.p. Accessed: May 23, 2024.

[5] R. Chen, "Intro to Shared Sequencing: Pooling resources to ensure better network decentralization and security," Medium, May 15, 2023. [Online]. Available: https://medium.com/@richardchen_81235/intro-to-shared-sequencing-1622d1fd51c9. Accessed: May 23, 2024.

[6] M. Neuder, J. Drake, "Execution Tickets," EthResearch, Dec. 23, 2023. [Online]. Available: https://ethresear.ch/t/execution-tickets/17944. Accessed: May 19, 2024.

[7] J. Drake, "ZK11: SNARK proving ASICs," presented at the Zero Knowledge Summit 11, Athens, Greece, Apr. 10, 2024. [Online]. Available: https://www.youtube.com/watch?v=URCH2d1cdyg. Accessed: May 19, 2024.

[8] Ethereum Foundation, "Sequencing and Preconfirmations Call,” YouTube. Available: https://www.youtube.com/playlist?list=PLJqWcTqh_zKHDFarAcF29QfdMIUpReZrR [Accessed: May 19, 2024].