@wmougayar
Understanding the Velocity of ETH and how the speed and flow of Ether's movement reveals the network's economic health.
Core Idea:
The Velocity of ETH measures how frequently ETH moves within the Ethereum ecosystem, whether it’s being transferred, used in smart contracts, paid as gas, staked, or exchanged across layers. It reflects not just how much ETH exists, but how alive it is within the network’s economic circulatory system.
Just like in traditional economics where currency velocity measures how often money changes hands, ETH velocity captures Ethereum’s real economic activity. It’s a crucial metric for understanding the health and dynamism of the network.
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