ETH is the sole medium with which blockspace can be purchased within the Ehtereum network (i.e., the only medium in which transaction fees are paid).
It means that all ecosystem-wise value-transfer activities (native ETH and any tokens or assets) require ETH payment for the transaction
[1] = ƒ(blockspaceDemand, feeMarketPressure)
blockspaceDemand — measurement of the computational resources required to process transactions (directly tied to ETH's exchange utility)feeMarketPressure — an abstract reflection of the competitive dynamics of transaction fee bidding (a direct value transfer mechanism)Since EIP1559 has been accepted, Ethereum has implemented partial fee burning: fees are subdivided into base fees and additional priority fees, with the former being burnt. This generates a consistent guaranteed upward deflationary pressure on the value of ETH.
[21] = ƒ(token_extant, token_burnt, token_generated)
token_extant — the amount of ETH in existencetoken_burnt — the amount of ETH burnt in a given timeframetoken_generated — the amount of ETH minted in a given timeframeEthereum's PoS consensus protocol requires that every validator stake at least 32 ETH. These tokens are not only exposed to possible unmitigated depreciation due to a required immobilisation period, but are also alienable in case of malfeasance by the validator.
[7] = ƒ(staking_period, amount_staked, price_at_staking)
staking_period — the duration of the lock-up periodamount_staked — the amount of tokens locked up by the userprice_at_staking — the price of the locked token position at the moment of locking; defines the locked value together with the lockedOnce a validator is included in the active set by staking a sufficient amount of ETH, he must also participate in the consensus, both to avoid being slashed (i.e., penalised in terms of partial stake alienation) and to qualify for remuneration.
[8] = binary
Reflects rewards earned by validators. When a validator performs his duties correctly, he is eligible to receive a number of rewards:
[22] = ƒ([8], priority_fee_income, consensus_reward_parameters, MEV)
priority_fee_income — the variable priority fee income of a validatorMEV — validator income due to MEVconsensus_reward_parameters — the parameters of the consensus reward emissions