Joseph Lubin expects an increase in demand and the price of ether after the launch of the London hard fork in the main Ethereum network. It will be caused by the possibility of ETH deflation.
Speaking in an interview on CNBC, Joseph Lubin explained the reason for his confidence. The London hard fork, which is expected to launch in August, makes several important improvements to the Ethereum network.
Lubin states that the issue of ETH still remains inflationary. But with the update, a significant part of the transaction fees will be burned by the network, which may lead to a reduction in the supply of ether. The network is also preparing for the transition from the consensus mechanism of proof of work (PoW) to the proof of stake (PoS) mechanism .
“In December or January, the network will replace the work confirmation mechanism with an extremely energy – efficient share confirmation mechanism that ensures trust in the network,” said Joseph Lubin.
He said that his company ConsenSys has already noticed an increased demand for ether for performing transactions and decentralized applications due to the freezing of a large amount of ether. Ether worth more than $60 billion is blocked in smart contracts of the DeFi protocols. About $6 billion of ether is also invested in staking on the ETH 2.0 signal chain. This situation, in his opinion, will only worsen after the London hard fork and the launch of Ethereum 2.0: “there will be an increase in demand, and with it the cost of ether.”