Hey there, crypto enthusiasts! If you’ve been keeping an eye on the blockchain world, you’ve probably heard the buzz around Ethereum and its potential to reshape global finance. A recent tweet from sassal.eth/acc (@sassal0x) caught our attention, breaking down what’s called the "Ethereum liquidity flywheel." Let’s dive into this concept and see why it’s got everyone talking!

What’s the Ethereum Liquidity Flywheel?

Imagine a cycle that keeps gaining momentum—like a playground flywheel you spin faster with each push. That’s the idea behind the Ethereum liquidity flywheel. According to sassal0x, it works like this:

• Treasury companies buy ETH: Big players start investing in Ethereum’s native cryptocurrency.
• They deploy ETH onchain: This ETH gets used in decentralized finance (DeFi) platforms, smart contracts, and other blockchain applications.
• Ecosystem grows with more TVL: Total Value Locked (TVL)—the amount of assets staked or locked in these platforms—increases, making Ethereum more liquid and attractive.
• More onchain activity: As more people use Ethereum, the network buzzes with activity.
• ETH price goes up: Higher demand and utility push the price of ETH higher.
• Repeat the cycle: The process starts all over, building on itself.

This self-reinforcing loop could, as sassal0x suggests, turn Ethereum into the "backbone of the global financial system." Pretty wild, right?

Why Does This Matter?

For those new to crypto, liquidity is like the oil that keeps the engine running. The more liquid a blockchain like Ethereum becomes, the easier it is to trade, invest, and build on it. The tweet highlights how treasury companies—think big corporations or funds—play a key role by locking up ETH. This boosts TVL, a metric you can check on sites like DeFi Llama, which recently showed Ethereum leading with over $64.5 billion locked as of June 2024.

As more ETH gets used, its value rises, attracting even more users and developers. This creates a virtuous cycle that could outpace other blockchains. Some replies to the tweet, like from @onchainwinx, even suggest this model could work on other chains, but Ethereum’s head start gives it an edge.

The Bigger Picture: Ethereum as a Financial Backbone

The idea of Ethereum becoming the foundation of global finance isn’t new. Articles like the one on Yahoo Finance from 2021 predicted this, pointing to Ethereum’s massive developer community (over 2,300 monthly active developers) and its role in DeFi. The liquidity flywheel takes this a step further by showing how practical use drives value, not just hype.

But it’s not all smooth sailing. Some X users, like @maximus_void, questioned if "ethics" (likely a typo for Ethereum) can truly lead, while @MashaKashchenko brought up Bitcoin’s dominance. These debates show the competition is fierce, but Ethereum’s smart contract capabilities and growing ecosystem give it a unique edge.

What’s Next for the Flywheel?

As of 06:57 PM +07 on July 25, 2025, the crypto world is watching this play out. The flywheel theory suggests that the more Ethereum is used, as @SourOGCrypto noted, the more valuable it becomes—a classic case of utility feeding value. If treasury companies keep investing and DeFi keeps expanding, we might see ETH prices climb higher, reinforcing its position.

For meme coin fans and blockchain practitioners, this is a chance to learn how larger ecosystems influence token trends. At Meme Insider, we’re excited to track how this could impact meme tokens built on Ethereum. Want to stay ahead? Keep an eye on TVL data and onchain activity—tools like CryptoQuant can help you dig deeper.

Final Thoughts

The Ethereum liquidity flywheel is more than just a theory—it’s a glimpse into how blockchain could redefine finance. Whether it fully becomes the global backbone remains to be seen, but the cycle sassal0x described is already in motion. What do you think? Will ETH keep spinning this flywheel to new heights? Drop your thoughts in the comments, and let’s keep the conversation going!

Disclaimer: Crypto investments carry risks. Always do your own research before diving in!