Meta-joke from the founder of Ethereum Vitalik Buterin

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On Sunday, Vitalik Buterin proposed a 120 million hard cap on Ethereum in an apparent April Fool’s joke that had more serious implications. On the same day, ether prices reached a new 18-week low. To be sure, the two developments are not at all related.

Buterin’s Meta-Joke

In a GiHub post, Buterin presented an argument for gradually removing Ethereum’s inflation rate by capping its total supply at 120,204,432. That’s double the amount sold during the original token sale.

“In order to ensure the economic sustainability of the platform under the widest possible variety of circumstances, and in light of the fact that issuing new coins to proof of work miners is no longer an effective way of promoting an egalitarian coin distribution or any other significant policy goal, I propose that we agree on a hard cap for the total quantity of ETH,” Buterin said.

The founder of Ethereum clarified on Monday that the proposal was actually a “meta-joke” designed to invoke discussion around the merits of a hard cap. In a series of tweets, Buterin said a hard cap would be warranted if the community believed in such a protocol. He also made a strong argument for why a fixed supply is worth considering because Ethereum’s adoption of Proof-of-Stake (POS) consensus will eventually make the current Proof-of-Work (POW) protocol obsolete.

Buterin also linked readers to an article he wrote in October that argued against inflationary tokens. Ultimately, his argument rests on the notion that cryptocurrencies can avoid becoming too inegalitarian through the creation of new coins, not through super-inflationary cycles of any single coin.

Ethereum’s Slow Grind

Ether prices were little changed on Monday after hitting fresh four-and-a-half-month lows over the weekend. The cryptocurrency was last seen trading at $389.27, bringing its total market cap to $38.5 billion. Ether values are up more than 5% over the last 24 hours.

 

More than $1.2 billion in Ethereum was traded on the major exchanges Monday, which is roughly a third lower than Friday levels. OKEx was the largest ETH market at roughly 10% of the daily volume. Bitfinex accounted for more than 9% of the daily transactions.

Ethereum has been one of the more volatile currencies of late, with losses accelerating since mid-February. The coin is down nearly 60% since Feb. 19. By comparison, the broader cryptocurrency market has declined roughly 48% over the same period.

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