{"id":49653,"date":"2026-08-15T14:35:01","date_gmt":"2026-08-15T14:35:01","guid":{"rendered":"https:\/\/cryptomag.finance\/?p=49653"},"modified":"2026-08-15T14:35:01","modified_gmt":"2026-08-15T14:35:01","slug":"grayscale-research-head-compares-ethereum-to-small-nation","status":"publish","type":"post","link":"https:\/\/cryptomag.finance\/?p=49653","title":{"rendered":"Grayscale research head compares Ethereum to small nation"},"content":{"rendered":"

Grayscale\u2019s head of research, Zach Pandl, has shared a thought experiment on X that recasts Ethereum as a tiny country running its books through money printing rather than taxes.<\/b><\/p>\n

Pandl tagged <\/span>his post<\/span><\/a> as a \u201cQuasi brainstorm on $ETH issuance.\u201d He then went into the details, where he stated that Ethereum \u201cis akin to a minimal nation-state\u201d that has one job, which is to guard property rights and the exchange of value.<\/span><\/p>\n

He also discussed how Ethereum will be funding its spending, having written that \u201cEthereum does not raise taxes to fund government services.\u201d<\/span><\/p>\n

Pandl said that the network funds itself through money printing<\/a>; in this case, that will be ETH. This revenue source is called seigniorage by economists, and it is the profit a currency issuer earns simply by creating money.<\/span><\/p>\n

Who will be protecting Ethereum\u2019s property rights in Pandl\u2019s setup?\u00a0<\/span><\/h3>\n

Stakers are the group that will be providing the service of protecting Ethereum. The stakers are then compensated for their services with newly printed ETH, according to Pandl.<\/span><\/p>\n

The setup brings fiscal and monetary policy into one loop, something that most economies tend to separate.\u00a0<\/span><\/p>\n

This is happening in Pandl\u2019s quasi-brainstorm as the act of securing the network is also the act of expanding the money supply.\u00a0<\/span><\/p>\n

It also highlights a difference between Bitcoin and Ether. BTC\u2019s supply is capped at a fixed number. However, ETH issuance floats instead, rising and falling with how busy the network is and how much of the token is staked. This makes scarcity harder to pin down for anyone who sees ETH as a store of value.<\/span><\/p>\n

Why is the ETH issuance math currently contested right now?<\/span><\/h3>\n

Ethereum validators collectively earn around 700,000 ETH a year in staking rewards, but currently, the ecosystem is reportedly short on cash to pay its core developers.\u00a0<\/span><\/p>\n

In June, former Ethereum Foundation coordinator Trent Van Epps pointed out that keeping the network\u2019s client teams running costs about $30 million a year. He highlighted the dangers of not having a clear source of funding lined up as the <\/span>Foundation cuts spending<\/span><\/a>.<\/span><\/p>\n

There have been various inputs on what the foundation can do to fill that gap. One camp believes that the gap can be filled by taking out from the rewards that go to validators.\u00a0<\/span><\/p>\n

However, critics of that move say that there is no point in doing that if validators are willing to part with some yield<\/a>. Their main argument is that there is no need to build a new distribution layer; instead, the network could simply issue less ETH.<\/span><\/p>\n

While Pandl\u2019s nation-state sketch is not a solution to the funding gap, it highlights that issuance is the treasury, and every argument about funding is an argument about how large that treasury should be.<\/span><\/p>\n

The smartest crypto minds already read our newsletter. Want in? Join them<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Grayscale\u2019s head of research, Zach Pandl, has shared a thought experiment on X that recasts Ethereum as a tiny country running its books through money printing rather than taxes. Pandl tagged his post as a \u201cQuasi brainstorm on $ETH issuance.\u201d He then went into the details, where he stated that Ethereum \u201cis akin to a […]<\/p>\n","protected":false},"author":1,"featured_media":49654,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"footnotes":""},"categories":[47],"tags":[],"class_list":["post-49653","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ethereum"],"yoast_head":"\nGrayscale research head compares Ethereum to small nation - Cryptomag<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptomag.finance\/?p=49653\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Grayscale research head compares Ethereum to small nation - Cryptomag\" \/>\n<meta property=\"og:description\" content=\"Grayscale\u2019s head of research, Zach Pandl, has shared a thought experiment on X that recasts Ethereum as a tiny country running its books through money printing rather than taxes. 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