Ethereum (ETH)

Ether is the native asset of the Ethereum network and is traded under the symbol ETH. Ethereum, on the other hand, is a blockchain network where smart contracts can operate alongside payment records. A smart contract is a program that performs on-chain transactions based on defined conditions. Although the name of the network and the name of the asset are often conflated in daily use, not all tokens on Ethereum are ETH.

What purposes is ETH used for?

Fees for transactions on the Ethereum mainnet are paid in ETH. This fee is related to the calculations performed and the network resources used. A token swap may involve more operations than simply sending ETH. Having a token like USDC in your wallet does not mean you have the ETH necessary to cover the network fee. While some applications offer tools that hide the fee from the user or collect it in another way, the underlying network accounting continues.

ETH is also used to participate in the network’s proof-of-stake security. In this participation, called staking, validators undertake block proposal and validation tasks. Running your own validator, staking through a service, and obtaining liquid staking tokens are different structures. Service commissions, withdrawal periods, contract risks, and operator risks vary according to the method.

How do applications work on Ethereum?

Decentralized exchanges, lending markets, stablecoins, and digital collectibles can use contracts on Ethereum. The EVM is the virtual machine where these contracts run; it helps network participants verify the same program result. The fact that an application is on an open network does not prove that its developer is trustworthy or that its code is bug-free.

For example, when you give a swap application permission to spend tokens, you are not just logging into a site. You may be authorizing a specific contract to use a specific amount. Ethereum’s network security does not automatically block a permission given voluntarily to a malicious application. For this reason, the security of the network and the security of the application transaction are evaluated separately.

Why is the supply not explained by a single figure?

ETH does not have a fixed upper limit of 21 million like Bitcoin. Validator rewards contribute to new production, while the burning of certain portions of transaction fees contributes to a decrease in supply. The net change is the result of these two factors. The occurrence of a burn in a certain period does not necessarily mean that the total supply decreased during that same period.

A decrease in supply is also not a guarantee of a price increase. Network demand, liquidity, market conditions, and users’ willingness to hold ETH can affect the price. When evaluating staking rewards, one should look not only at the increase in the number of tokens but also at commissions and the change in the value of ETH in TRY or USD. Token yield and monetary yield can produce different results.

Relationship with Layer 2 networks

Layer 2 solutions aim to scale by processing transactions in a different execution environment and establishing specific validation and data relationships with Ethereum. Fees and transaction experiences may differ on these networks. However, the balance on the Ethereum mainnet is not moved to another network simply by changing the network selection in the wallet. A suitable bridge or supported withdrawal path may be required for transfer.

Seeing the same 0x address does not mean you are using the same security model. Bridge contracts, sequencers, upgrade authorities, and exit times vary according to the network used. The use of ETH on a Layer 2 also does not indicate that all applications carry the same risks as the Ethereum mainnet. Before performing a transaction, verify the network name and the asset supported by the target application.

Data affecting ETH price

The price, market capitalization, and volume on this page track the ETH market. The total number of transactions on the network or the total value locked in an application does not mean that income is directly distributed to ETH holders. The relationship between network usage and the token’s economic function must be examined separately. Current news helps follow developments, while Ethereum and gas guides help in understanding how transactions work.

Official sources

• Ethereum: ether and use cases
• Ethereum: staking options
• Ethereum: transaction fees
• Ethereum: Layer 2 networks