Trying to value ether based on the cost saving capacities of web3 : ethereum

Good day everybody!

I’m posting right here as a result of this evaluation closely depends on web3 capabilities.

TL;DR: I’m making an attempt to worth 1 ETH utilizing a easy (and flawed) analogy technique consisting of an estimate of how a lot it could value to function the identical easy service (a raffle) on a standard web site utilizing bank cards and on web3. I find yourself with an estimate of $971 for 1 ETH.

Disclaimer: I don’t personal any crypto and I’m not knowledgeable programmer, I solely have some notions. I’ve adopted cryptocurrencies from afar since I first heard of bitcoin virtually 10 years in the past however there may be MUCH I don’t know, as you’ll realise by studying this submit.

For a brand new know-how to be extensively adopted, it has to both do an analogous job for less expensive, or a a lot better job for related prices. Higher job for less expensive is clearly most popular however not obligatory. Worse job is a no-go. Higher job for greater prices could be doable however it’s a tough promote.

The case for web3 resides in its superior capabilities (primarily trustlessness imo) in comparison with a standard web site working with bank cards and « belief me bro » ensures. So a service operating on web3 doesn’t need to be cheaper however it shouldn’t be extensively costlier both.

Right here is my premise: if I can calculate the prices of a operating a service with bank cards (in USD) and calculate the prices of operating an analogous service with web3 (in ETH), I can equate the 2 and discover out the worth of 1 ETH in USD.

I’m conscious that that is no silver bullet as a result of it’s just one instance. One other service would yield totally different outcomes. And it’s all depending on fuel worth, clearly.

So, right here we go: I selected a easy service: a raffle. Each week, 100 individuals put 0.01 ether every on a wise contract and each week, the supervisor chooses pseudorandomly a winner who will get the entire stability (1 ETH). The contract then resets and is prepared for an additional raffle. I took the code for this good contract from the Ethereum Developer’s Information by Stephen Grider and tailored it for the newer model of solidity so that it’s going to compile:

pragma solidity ^0.8.7;

contract Lottery {
    handle public supervisor;
    handle[] public gamers;

    constructor() public {
        supervisor = msg.sender;
    }

    perform enter() public payable {
        require(msg.worth > .01 ether);

        gamers.push(msg.sender);
    }

    perform random() non-public view returns (uint) {
        return uint(keccak256(abi.encodePacked(block.issue, block.timestamp, gamers)));

    }
    perform pickWinner() public payable restricted {
        uint index = random() % gamers.size;
        handle payable winner = payable(gamers[index]);
        winner.switch(handle(this).stability);
        gamers = new handle[](0);
    }
    modifier restricted(){
        require(msg.sender == supervisor);
        _;
    }
}

Remix tells me that the deposit value is 360 400 fuel and the execution is 385 065 fuel. The enter() perform is 48 742 fuel. The pickWinner() perform value infinite fuel apparently. So right here I’m making the idea that the price of the pickWinner() perform is just the execution value of the contract (385 065) minus the price of the enter() perform (48 742) since there aren’t any different capabilities within the contract. Thus, the price of the pickWinner() perform is 336 323 fuel.

The annual prices of operating this contract are primarily: the deposit value (as soon as) + the enter() value (100 instances every week, so 52*100 = 5200 instances) + the pickWinner() value (as soon as weekly so 52 instances).

That provides me: 360 400 + 48 742 * 5200 + 336 323 * 52 = 271 307 596 fuel per 12 months

Now we have to put a worth in ETH to this fuel. The worth of fuel modifications day by day and clearly, assuming a worth has a big effect on the outcomes. So I’m selecting a worth (30 Gwei per fuel) that’s decrease than the each day averages of the final two months in order that this evaluation isn’t dismissed on the grounds of hostility in the direction of ethereum.

The annual prices of operating this raffle are due to this fact: 271 307 596 fuel * 30 Gwei/fuel = 8 139 227 880 Gwei = 8.14 ETH

Now, let’s do the identical exercice for a raffle service operating on conventional webhosting and bank cards.

This text tells me that operating an internet store by means of WooCommerce will value me round $300 per 12 months plus transaction prices. These prices are 2.9% + 30 cents per transaction.

Assuming a market worth of $2000 per ETH, every week, 100 individuals would wire $20 (0.01 ETH) to the web site and every week, the supervisor would wire $2000 to the winner, assuming that is doable.

The annual transaction prices are due to this fact: 100 * 52 * (0.3 + 20 * 0.029) + 52 * (0.3 + 2000 * 0.029) = $7,608

Including the prices of webhosting ($300), we find yourself with an annual value of $7,908.

Now, for the final half, we merely equate 8.14 ETH and $7,908 to finish up with 1 ETH value $918.

I’m posting right here as a result of I do know that this evaluation will not be excellent. I don’t fake that I’ve discovered THE technique to worth ether. It’s simply A method that I discovered cheap. However I’m right here to ask on your assist to make it higher. Because it’s just one explicit case, it’s not value it to go after each element, however did you discover one thing that will massively impression the outcome? Are any of my assumptions utterly mistaken? What would you modify and what’s the outcome?

I’m right here to be taught and I’m wanting ahead to your feedback 🙂