Ether (ETH)

Overview

Ethereum accounts use ETH for value transfers and gas. Every transaction specifies fee parameters, and the network charges according to computation, data, storage access, and block-space conditions. Failed contract execution can still consume ETH fees.

Validators stake ETH to participate in proof-of-stake consensus. They earn protocol rewards and can incur penalties or slashing for incorrect behavior. Individual staking, pooled staking, custodial staking, and liquid-staking tokens have different custody, withdrawal, operator, and smart-contract risks.

ETH supply changes through issuance to validators and fee burning. Net supply can be inflationary or deflationary over a period depending on network activity. Burning does not create a fixed maximum supply.

Smart contracts and decentralized finance commonly use wrapped Ether, or WETH, because ERC-20 interfaces expect token contracts. WETH is distinct from native ETH even when it is redeemable one-to-one through a contract.

Applications should distinguish ETH on Ethereum mainnet from bridged or native ETH-like assets on layer-two and EVM chains. The same address can hold unrelated balances across networks.

ETH is both a market asset and the resource that powers Ethereum execution and security. Its technical utility, staking role, collateral use, and investment value should be evaluated separately.

Treasury systems should separate available ETH, validator stake, pending withdrawals, wrapped ETH, and bridged representations. All can be valued against ETH while having different liquidity and control. This prevents a technically large balance from being mistaken for funds available to pay immediate gas or obligations.

Native-asset economics connect issuance, fees, rewards, and security. New supply may compensate validators or miners, while burns, treasury allocations, or governance decisions can alter circulating supply and incentives.

Wrapped Ether (WETH) may appear alongside Ether (ETH), but they can represent different contracts, issuers, claims, or liquidity conditions. Each record should retain its exact asset and network identity.