Ethereum’s monetary policy works well today, but it is still harder to explain than it needs to be.
We currently rely on:
- variable PoS issuance
- fee burn via EIP-1559
- and a dynamic equilibrium between the two
This is elegant, but not simple.
Proposal: introduce a hard cap at 128,000,000 ETH.
With the current supply at ~121M, this leaves ~7M ETH of headroom, while formalising the scarcity Ethereum is already converging toward.
The rule
Add a single invariant:
If total supply ≥ 128,000,000 ETH, then issuance = 0
- Below the cap → normal issuance rules
- At or above the cap → no new ETH issued
- Burn continues via EIP-1559
This makes the system:
- bounded above
- still responsive below the cap
- strictly non-inflationary at the ceiling
Why this helps with ultrasound money
1. A simple Schelling point
- clean
- easy to communicate
- comparable to Bitcoin’s 21M
Ethereum’s monetary policy is often “too clever,” which makes ETH harder to explain as a scarce asset. A hard cap removes that ambiguity.
2. From conditional to guaranteed scarcity
Today:
ETH can be deflationary
With a cap:
ETH supply is strictly bounded, and burn can push it lower
This turns ultrasound money from an emergent property into a protocol guarantee.
3. Alignment with reality
We are already:
- at ~121M supply
- operating under low issuance
The cap simply formalises an endpoint that is very unlikely to ever be reached.
So the question becomes:
why not explicitly codify what is already true in practice?
Conclusion
Ethereum already behaves like a scarce asset, but communicating this externally is difficult.
A hard cap makes this:
- explicit
- enforced at the protocol level
- trivial to explain
Ultrasound money, with a hard ceiling.
Cross post from https://ethresear.ch/t/eth-needs-a-supply-cap-at-128-million/24618