TLDR:
- Ethereum serves as non-rivalrous and non-excludable infrastructure, akin to the Internet and GPS.
- A new valuation framework introduces a trust surplus metric that assesses reduced friction in global transactions.
- Ethereum competes primarily with traditional global systems rather than directly with other blockchains.
- The network’s intrinsic value is mostly hidden, yielding economic benefits before full market acknowledgment.
Ethereum is evolving from a competitive blockchain platform into a more fundamental infrastructure.
Blockchain expert William Mougayar recently proposed a framework that classifies Ethereum as a global public good, similar to the Internet or GPS.
This view challenges existing valuation techniques, suggesting the actual value of the network goes beyond traditional metrics like transaction fees or processing speeds.
Value Protocol Architecture Mirrored with Internet Development
Mougayar’s insights, shared via the official Ethereum X account, draw parallels between Ethereum’s growth and that of the Internet.
He asserts that Ethereum operates as a global public good that is “non-rivalrous, non-excludable, and system-enabling.” While the Internet functions as an information protocol, Ethereum serves as a value protocol.
Both systems feature a foundational layer accessible to everyone, facilitating higher layers for commercial and institutional activities. Characteristics of public goods allow Ethereum’s infrastructure to promote participation without limiting access, enabling users to create applications and transact freely.
Three-Part Framework Capturing Broader Economic Contributions
The suggested valuation framework consists of three elements: captured value, flow value, and trust surplus. Captured value accounts for conventional financial metrics such as fees and token economics.
Flow value assesses economic contributions throughout the ecosystem, including decentralized applications and institutional applications.
Trust surplus is the most innovative part of this framework, measuring the economic value derived from diminished friction in global transactions, with specific benefits identified like reduced settlement friction and lower verification costs. This creates a trust dividend that amplifies as network adoption expands.
This new perspective shifts Ethereum’s competitive landscape, positioning it as competing with the established methods of global coordination rather than other blockchain platforms. Overall, Ethereum’s long-term strength is rooted in facilitating trust minimization and large-scale economic settlements.
The official account emphasizes that to grasp Ethereum’s value, one should consider dependency, flows, and trust minimization, as these elements reveal its influence on global economic infrastructure rather than its standings among competing blockchain technologies.
