Many people remain enthusiastic about the Ethereum price potential. A lot of changes are the pipelines for the network, and positive changes are coming. Below are some examples of what the future may hold.
CME Ethereum Futures
When it comes to futures contracts for institutional clients, they can either bring positive attention or trigger more volatility. Bitcoin’s futures have – eventually – yielded positive momentum after a while. What will happen when CME launches Ethereum futures remains a matter of debate. It is a strong signal to the crypto community, as it shows demand for exposure to ETH is picking up.
For those unaware, Ethereum futures by CME will launch in February of 2021. The listing occurs on February 8th, and analysts expect a big volume surge for this new vehicle. Every contract unit is for 50 Ether, giving them a steep value. Three years after Bitcoin futures, CME takes the next step.
Layer-two Scaling
Although it has been rumored for years, serious progress is made for Ethereum’s layer-two scaling. Everyone knows the base protocol will not be able to accommodate further growth until sharding goes live. Until that happens, every layer-two solution will be more than welcome.
Solutions such as Loopring show how an AMM DEX can operate at low fees. It may be less appealing to liquidity providers, but the option is there. Lower fees create opportunities for providing multi-tiered rewards, such as native protocol tokens.
The EIP-1559 Proposal
One of the up-and-coming Ethereum proposals to keep an eye on is EIP-1559. According to Github, it will introduce a transaction pricing mechanism with fixed-per-block network fees. Those fees are burned immediately, reducing the ETH supply ever so slightly.
Additionally, this solution wants to expand and contract block sizes to avoid network congestion. A viable addition, as the network has been congested regularly. When that happens, network fees rise, and users become disgruntled. A solution like EIP-1559 is rather intriguing and seems compatible with Ethereum 2.0.
Lower Ethereum Inflation
The upcoming change of Ethereum 2.0 is how it will introduce a different issuance system. There will be no hard cap on ETH for the foreseeable future, but keeping the issuance rate at 1% is a step forward. Assuming EIP-1559 is going live as well, it is likely the actual “inflation rate” will go negative sooner rather than later. How these figures will evolve exactly has yet to be determined.
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