Opinion: ETH spring is here?
Editor's Note: This article comes fromUnitimes（ID：Uni-times）, Author: Jhonny, Editor: Jhonny, published with permission.
, Author: Jhonny, Editor: Jhonny, published with permission.
Today, the market price of ETH broke through the $200 mark, causing an uproar. At the same time, the daily gas consumption of the Ethereum network has also hit a record high. See below:
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Let's first look at the analysis of the recent Ethereum network situation by Coin Metrics, an encrypted asset market research platform.
According to the data of Coin Metrics, the current ETH daily transaction fee is catching up with BTC: as of September 15, 2019, the ETH daily transaction fee in the Ethereum network reached 182,899 US dollars, and the BTC daily transaction fee in the Bitcoin network was 185,993 US dollars, The two are very close. See below:
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ETH and BTC daily transaction fee change trend since 2019
Transaction fees represent the true demand and usage of the blockchain network. High transaction fees are critical to the long-term security of the blockchain network. As the block reward decreases over time (i.e. the block reward is halved), transaction fees will account for an increasing proportion of the miner's revenue. Total fees are therefore a strong signal of the security and long-term sustainability of the entire blockchain network.
The following figure shows the trend of the BTC/ETH daily transaction fee ratio since 2018 (we choose to omit the situation before 2018 because before 2018, the daily fee of BTC is usually higher than the daily fee of ETH by at least 10- 25 times).
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Change trend of BTC/ETH daily transaction fee ratio
In the figure above, the blue line represents the trend of the BTC/ETH fee ratio, and the green line is the dividing line of the BTC/ETH fee ratio: if the blue line is above the green line, it means that the BTC/ETH ratio exceeds 1 (which means BTC’s daily fee is higher than ETH’s daily fee); if the blue line is below the green line, it means the BTC/ETH ratio is less than 1 (which means BTC’s daily fee is lower than ETH’s daily fee).
As can be seen from the above figure, the daily transaction fee of ETH exceeded the daily transaction fee of BTC for a period of time in 2018, but most of the time, the daily transaction fee of BTC exceeded the daily transaction fee of ETH. In fact, from April to mid-August 2019, the daily transaction fee of BTC has soared even more. During these four months, the daily transaction fee of BTC has basically exceeded the daily transaction fee of ETH by 5-10 times .
The Omini protocol-based stablecoin Tether (USDT) was originally built on top of the Bitcoin blockchain, but currently Tether also supports token versions based on the Ethereum protocol. Since 2019, Tether users have been migrating from Bitcoin-based USDT to Ethereum-based USDT.
As shown in the figure below: In the figure below, the blue line represents the change trend of USDT transaction volume based on Bitcoin, and the green line represents the change trend of USDT transaction volume based on Ethereum.
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As can be seen from the graph, the daily transaction volume (blue line) of Bitcoin-based USDT has been increasing for most of 2019, and even reached its highest daily transaction volume ever on August 7, 2019. Since then, however, daily transaction volume (green line) for Ethereum-based USDT has skyrocketed, peaking on September 9, 2019.
In fact, Ethereum-based USDT transaction volumes are growing and accounted for more than 25% of all Ethereum network transaction volume on September 8. Since mid-August 2019, the USDT transaction volume based on Ethereum has always accounted for more than 10% of the total daily transaction volume of the Ethereum network, as shown in the figure below:
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The percentage trend of the daily transaction volume of USDT based on Ethereum to the transaction volume of the entire Ethereum network
Similarly, recently, the daily transaction volume of USDT based on Ethereum has also exceeded the daily transaction volume of USDT based on Bitcoin, and recently reached the highest amount in history, as shown in the figure below. The chart below shows the 7-day moving average of transaction volume for Bitcoin-based USDT (blue line) and Ethereum-based USDT (green line):
In addition, the number of account addresses holding at least $10 USDT also showed a similar trend. The figure below shows the trend of the number of Bitcoin-based unique addresses (blue line) and Ethereum-based unique addresses (green line) holding at least $10 USDT: It can be seen that Ethereum holds at least $10 The number of USDT addresses is catching up to the number of USDT addresses in Bitcoin.
The reason for choosing an account holding at least $10 USDT is that this amount is both small enough (enough to cover most retail investors) and large enough (you can ignore unimportant accounts), although many users have multiple addresses.
At the same time, the daily gas consumption of Ethereum has also recently risen to a historical peak, as shown in the figure below. Coin Metrics believes this is most likely driven by the recent uptick in Ethereum-based USDT transaction volumes.
According to ethgasstation.info, Ethereum-based USDT transactions used the most Gwei over the past 30 days (at the time of writing).
Let's take a look at the percentage changes of ETH transaction fees and BTC transaction fees in miners' income (note: miners' income = block reward + transaction fee). See below:
It can be seen from the figure that in the past 30 days, the proportion of ETH transaction fees in the revenue of miners has begun to catch up with BTC transaction fees.
All of the above data suggests that the recent ETH/BTC transaction fee reversal is likely driven by the Bitcoin-based USDT-to-Ethereum conversion, according to Coin Metrics. If so, the shift will continue moving forward as more and more users switch to using Ethereum-based USDT.
According to the analysis of Coin Metrics, the platform believes that the main reason for the recent increase in Ethereum Gas usage is that the Ethereum-based USDT transactions consume a large amount of Gas. The increase in the Gas consumption of the Ethereum network means an increase in network usage and transaction volume, which often brings about network congestion, which drives up ETH transaction fees, which in turn drives up the price of ETH to a certain extent.
So what are the reasons for the recent rise of ETH?
In the past 6 months, the hash rate (computing power) of the Ethereum network has continued to increase, as shown in the figure below. This means that despite the uncertain state of the future of mining on the Ethereum network (including whether ProgPoW will be implemented, and the arrival of Eth2.0), the miners of the current Ethereum network are still bullish on the price of ETH.
The upward trend of the hash rate of the Ethereum network in the past 6 months
At the same time, the value of ETH locked in DeFi is also rising and hitting record highs. See below:
ETH Value Locked in DeFi Rising Trend
The number of daily active addresses on the Ethereum network has also reached a 10-month high. See below:
Daily trend of the number of active addresses on the Ethereum network
As of now, all DeFi protocols have issued a total of more than $500 million in loans, which is an important milestone. See below:
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The trend of the proportion of loans issued by each DeFi agreement
