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BTC 
ETH The head of grayscale research compares Ethereum to a "small country printing money"
Zach Pander, head of grayscale research, shared a thought experiment on Platform X to reimagine Ethereum as a micro-state whose financial operations rely on printing money rather than collecting taxes. Pander labeled the post a "quasi-brainstorm about the release of $ETH." He later elaborated that Ethereum is "similar to a minimized nation-state" and its only responsibility is to protect property rights and exchange of value.
He also discussed how Ethereum funds its expenditures, writing: "Ethereum does not finance government services through taxes." Pander said the network finances itself by printing money, which means ETH. Economists call this source of income "seigniorage," the profit that money issuers can earn simply by creating money.
Who will protect Ethereum's property rights in Pander's setting? The pledger will be responsible for providing services to protect Ethereum. According to Pander, pledgers will receive compensation through newly minted ETH. This setting integrates fiscal and monetary policy into a closed loop, and most economies tend to separate the two. In Pander's quasi-brainstorming, the act of protecting the network is itself the act of expanding the money supply.
This also highlights the difference between Bitcoin and Ethereum. The upper limit of Bitcoin's supply is fixed, while the circulation of Ethereum is floating, increasing and decreasing with changes in network activity and the amount of token pledges. This makes it difficult for anyone who views Ethereum as a store of value to define its scarcity.
Why is the mathematical calculations released by ETH currently controversial?
Ethereum verifiers receive a total of approximately 700,000 ETH each year through pledge rewards, but it is reported that the ecosystem currently lacks cash to pay its core developers. In June, former Ethereum Foundation coordinator Trent Van Epps pointed out that it would cost about $30 million a year to keep the web client team running. He highlighted the risks that could arise if the source of funding was not clear as the foundation cut spending.
There are various opinions on how the foundation can fill this funding gap. One faction thinks it can be filled by taking a portion of the rewards allocated to verifiers. However, opponents say it makes no sense if the verifier is willing to give up some of the proceeds. Their main argument is that there is no need to build a new distribution layer, the network simply needs to reduce ETH circulation.
Although Pander's national metaphor is not the solution to the funding gap, it reveals that circulation is the treasury, and all debates about funding are essentially debates about how big the treasury should be.
