$ETH ultrasound narrative is dead!

Or is it?

As EF scales the L1 and $ETH pumps, the ultrasound narrative is coming back. What a surprise :)

I'm not the first to write about it, but the market is yet to internalize the message.

The logic goes like this:

Gas limit (now ~36M) could hit 150M, boosting L1 scalability. Critics would say "oh that's bad, because lower fees burn less $ETH. Buy my alt-L1!"

That's the old thinking.

True that more txs per block = lower fees, but more activity could mean more ETH burned.

Higher gas limit → more txs outweigh lower fees → potentially more burn.

As 
@hanni_abu
 calculates, "at 36M and the deflationary threshold it 14.5 gwei.

At a 300M gas limit the deflationary threshold becomes 1.74 gwei (14.5gwei*36M/300M)."

He also adds that as gas prices drop, users are more willing to pay higher fees during congestion:

E.g., at $0.01, a 100% premium to $0.02 feels more acceptable than jumping from $5 to $10.

Lower prices make people less sensitive to congestion fees.