ETH Utility

Definition ∞ ETH utility describes the practical applications and functions of Ether, the native cryptocurrency of the Ethereum blockchain. Beyond its role as a store of value, ETH is primarily used to pay for transaction fees (gas), secure the network through staking in the Proof-of-Stake consensus mechanism, and serve as collateral or a medium of exchange within decentralized applications. Its utility is fundamental to the operation of the Ethereum ecosystem. The diverse applications drive its value.
Context ∞ The discussion surrounding ETH utility is central to its long-term value proposition and the growth of the Ethereum network. The transition to Proof-of-Stake (the Merge) significantly enhanced ETH’s utility by enabling staking rewards and introducing a burning mechanism for transaction fees. A critical future development involves the continued expansion of the Ethereum ecosystem, particularly with layer-2 solutions, which further broaden ETH’s use cases and solidify its position as a foundational digital asset for decentralized computing.