Is Ethereum the Most Anticipated Project of 2020?
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Beep News (ID: gh_2279df4d40e5)
Beep News (ID: gh_2279df4d40e5)
Ethereum is a great investment and one of the really exciting ecosystem projects that further expands its potential as an investment.
According to blockchain media reports, on April 10, nearly 90% of ETH margin traders on Bitfinex were long ETH, involving an amount of about 314 million US dollars.
This anomalous ETH margin long has caught the attention of the industry. Some people think that after the 3.12 plunge for nearly a month, ETH may bottom out and rebound in price, and some people speculate that the crazy long on Bitfinex is related to the smooth progress of ETH2.0 "0 stage".
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Ethereum's "mid-life crisis" and ETH2.0 ambition
Ethereum is a classic project, and another layer of classic means "old". On the one hand, the low throughput determined by the PoW consensus mechanism restricts the development of all aspects of the Ethereum network; on the other hand, as the wave of smart contracts and ICO fades, it is becoming more and more difficult for Ethereum to compete with new concepts, new gameplay, and new projects for users attention.
In the face of this "middle-aged crisis", the Ethereum community launched a "self-help", and the tools for "self-help" are the ETH2.0 vision and the DeFi ecology.
The process of transitioning from version 1.0 of ETH to version 2.0 is actually the process of realizing the transition from a "disorderly decentralized" network to an "orderly decentralized" network. In ETH1.0, all miners have equal status, and bookkeeping miners are generally elected according to "more work, more pay".
In ETH2.0, the network presents a two-layer structure. In the underlying structure, through sharding technology, tasks waiting to be processed, such as transaction verification, DApp operation, etc. are decomposed, and "miners" are grouped. Different "miner groups" handle different types of tasks, and different "miner groups" Process tasks in parallel to increase network speed.
In the two-tier structure, a concept called "Beacon Chain" (Beacon Chain) is introduced, which is equivalent to a management team, which is used to record the list of "miners", reward and punish the behavior of "miners", and Miners' labor results" - the hash value of all transactions is recorded.
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Image source: Vernacular Blockchain
The upgrade from ETH1.0 to 2.0, whether it is the realization of sharding technology or the transformation of the consensus mechanism from PoW to PoS, is unprecedented. This transformation is highly expected by the industry, but it is also extremely difficult to realize. The transformation of the consensus mechanism is likened to changing the tires of a moving car.
The beautiful vision of ETH2.0, the feasible upgrade plan, and the continuous advancement of the upgrade have made many industry practitioners, especially some more experienced practitioners, have a more favorable opinion of Ethereum.
There is a bullish sentiment on Ethereum in the market. This sentiment is reflected in the price of the currency. The price performance of Ethereum this year is even better than that of Bitcoin, which has a favorable halving. According to non-small data, as of the time of writing, the price of Ethereum has increased by more than 22% this year. In contrast, the price of Bitcoin has declined by about 5%.
In an interview, Peng Song, the initiator of the CZZ project and a professional in "big data speculation", said that "Ethereum is a very important (concern) direction this year, and the halving of Bitcoin is more like a catalyst for the rise of Ethereum. "
ETH2.0 may still be stuck in the conception of the future, and DeFi has given birth to a new round of prosperity on the Ethereum network. The growth and anti-fragility of the Ethereum DeFi ecosystem can be confirmed by some data.
Image source: DappRadar
"DappRadar 2020 Q1 Dapp Industry Review" data shows that the number of daily active users of Ethereum in the first quarter of this year increased by 64% compared with the same period in 2019, of which DeFi daily activity increased by 86%, and exchange daily activity increased by 99%.
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Image source: DappRadar
During the black swan market from March 12th to 13th, Ethereum and the DeFi ecology attached to it experienced a sudden stress test. Although it is true that the currency price and on-chain activities have been impacted, the performance of Ethereum is basically impressive. Satisfied, the DeFi ecology has demonstrated a part of its ability to resist extreme market conditions, and some indicators have even shown a trend of rising against the trend.
The most obvious is the performance of DeFi protocols including Uniswap, Kyber, etc.
On March 13, the number of daily active users related to the DeFi protocol reached its peak, and the number of users on this day alone accounted for more than 11% of the total number of users in the first quarter.
Even more obvious is the increase in the number of users interacting between DeFi protocols.
The following are the user volume charts of each DeFi platform in January and March this year. The yellow area represents the number of users interacting between two DeFi protocols, and the red area represents the number of users interacting between three or more DeFi protocols. It can be seen that compared with January, the number of interactive users in March has increased significantly.
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Image credit: Alethio
In the currency price fluctuations, the decentralized lending platform represented by MakerDAO has been greatly impacted, but it also showed a strong self-healing ability in the "post-disaster".
It is reported that on March 12th, MakerDAO carried an unimaginable workload, and the loans liquidated within 24 hours were 10 times more than those that had been liquidated in its entire life cycle.
Under such a huge workload, a large number of mortgage debt positions were liquidated on MakerDAO, the price feed was delayed, the stable currency Dai had liquidity shortages and premiums, and more than $4 million in bad debts that received widespread attention from the industry.
Within a few days after the market turmoil, the MakerDAO community voted to approve the "repair plan":
Repay debts by minting and auctioning the management token MKR; on the basis of ETH and BAT, add a third stablecoin USDC supported by legal currency as collateral assets to alleviate Dai liquidity problems; launch a collateral auction fuse mechanism; adjust several parameters etc.
3.12 The sharp drop in currency prices seems to have turned on the switch for the issuance of stablecoins. During periods of drastic price fluctuations and after shocks, stablecoins represented by USDT continue to issue additionally, and Ethereum has become the best container to absorb these newly added stablecoins.
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According to AMBCrypto, 75% of stablecoins currently on the market are settled on the Ethereum network. Ethereum allows stablecoin users to access the DeFi protocol, which allows stablecoins to have a smoother circulation and adds liquidity to DeFi.
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The performance promise of ETH2.0, the increasing number of users, the rich DeFi ecology, and the friendly stablecoin container... These characteristics paint a very positive future for Ethereum. We also believe that it is far from It will be what Ethereum will eventually look like.
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As Xu Kun, chief strategy officer of OKEx, said at the cloud summit, "Whether it is in terms of data on the chain, ecological development or community activity, the value of Ethereum is seriously underestimated."
Note: This article is not for investment reference.
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