This is a segment of the 0xResearch newsletter. Subscribe to read the full edition.
The outcome of World War II was fundamentally determined by access to oil.
As a result, resources from the final stages of the war, where Nazi Germany relied on extraordinary measures to maintain basic mobility, have been exhausted.
The oil situation in the Imperial Japanese army was just as tragic. Daniel Yergin’s Pulitzer Prize-winning book awardhe documented the Japanese way kamikaze Suicide pilots will fill their tanks halfway through as they had no intention of returning from the mission.
The Japanese army, both Nazi Germany and the Empire, was defeated because they ran out of oil, not because of lack of talent or armament.
Oil’s enduring legacy in the history of the most lethal conflict in human history continues to influence and echo through modern thinking.
For example, “Data is a new oil” is the cries of large tech critics as they scream for stronger regulations for high-tech companies.
Whether they do it unconsciously or not, the Philosopher draws similarities between the historical importance of oil and the new value of data in the digital economy.
That analogy has also permeated the code, and is evident in the use of words such as “gas” and “burn.”
To get the most out of that meme is co-authored by top Ethereum stakeholders in last week’s Bull Case for ETH report.
The report predicts ETH at $8,000 per ETH in the short term ($1 trillion in market capitalization).
Long-term monthly mathematics is even further. ETH steals at today’s prices at $85 trillion, with ETH of $706,000 per person.
Source: Ethdigitaloil
Some of this valuation model benchmarks ETH against today’s $85 trillion oil market valuation.
However, ETH as a “digital oil” is even more complicated than that.
One, unlike the actual military, ETH’s heaviest Gasler has a cheaper option.
Historically, the biggest gaslers of Ethereum were Uniswap and Tether. Both have actively moved their execution into a more gas-optimized environment (Unicane and Plasma).
Plasma is still not alive and Unicane is still in its early days, but it weakens the ETH case quite a bit as “digital oil.”
How is the availability of data?
The biggest ETH-depleted bill for L2S is the cost of using Ethereum DA, that is, the cost of exposing raw transaction data to L1.
Before the introduction of Blob space with EIP-4844, 1 kb of call data costs around 16,000 gas, or about $1.44 (assuming ETH at $3,000).
This is just 80-90% of the typical L2 price.
The EIP-4844 has reduced legacy call data costs by around 99%, but it’s still 20-30 times cheaper if the rollup uses alternative DA layers like Celestia or Eigenda.
ETH as a “digital oil” paper is even more disrupted when you consider that Ethereum itself faces a tough competition from its competing L1.
If Ethereum can claim native assets as “digital oil,” then Solana, Sui and all other ecosystems can do so too.
