Editor's Note: This article comes fromBlue Fox Notes (ID: lanhubiji), reprinted by Odaily with authorization.
Editor's Note: This article comes from
Blue Fox Notes (ID: lanhubiji)Blue Fox Notes (ID: lanhubiji), reprinted by Odaily with authorization.Foreword: The development of Ethereum has changed a lot compared to three years ago. The main use case on Ethereum before was the token financing of projects. Now, the total value of ERC20 tokens circulating on Ethereum is close to that of ETH. What does it mean for Ethereum? What does the growth of ERC20 assets mean for Ethereum? Especially what is the impact on the ETH asset itself? What is the impact of increased non-ETH usage on Ethereum leading to higher fees? Regardless, current developments on Ethereum cannot be ignored. This article, from Ryan Watkins, is more about asking questions than drawing conclusions. This article was translated by "SN" of "Blue Fox Notes".ERC20 tokens are approaching 50% of the value stored on Ethereum. Over the past two years, the way value is stored and transferred on the Ethereum blockchain has completely transformed.ETH is getting closer to being reversed by its own chain. Whether it can reverse depends mainly on the growth of stablecoins and the growth of ETH's own value. (Blue Fox Note: The reversal here refers to the comparison of ETH and ERC20 assets in the value of circulation on Ethereum)Still, this shift in value on Ethereum is not just about storing assets, but about transferring large amounts of value. Ethereum is on track to surpass $530 billion in settlements this year, driven by stablecoin growth.ETH’s role as a medium of exchange is gradually diminishing, which may not be good for ETH in the long run. However, the Ethereum community is well aware of the need to maintain ETH's special status on the Ethereum blockchain.Additionally, the use of ETH in DeFi helps solidify its position as Ethereum’s primary store of value. ETH has always been the trust-minimized asset on Ethereum, therefore, ETH is the reserve asset of the Ethereum financial system (DeFi).The increasing non-ETH usage on Ethereum is worth digging into, regardless of its long-term impact on ETH’s monetary premium. In this regard, it is safe to say that the increasing usage on Ethereum is a positive trend for the foreseeable future.An important aspect of Ethereum’s programmability is that it allows Ethereum to quickly adapt and find product and market fit. The success of these experiments directly translates to increased usage of the Ethereum blockchain, and at the same time, it puts upward pressure on fees.Fees are important for a number of reasons.One is that higher fees point to greater sustainability, allowing blockchains to rely less on issuing new tokens for security over time.The second is that the falling inflation rate is important to solidify the perception of Ethereum as a rare asset. Regarding this, it drew criticism from the Bitcoin community.
