This article explores the positive and negative logic of ETH
Editor's Note: This article comes fromGolden Finance, reprinted by Odaily with authorization.
Golden Finance
, reprinted by Odaily with authorization.
It is the transition period before the launch of Ethereum 2.0, but the performance of the secondary market of ETH is indeed in a very tangled stage. Why do you say that? Because it is positive and negative will exist anxiously at any time. As the key date is approaching, both good and bad news will be reflected in the market public opinion. Investors will get the result after digesting the key events and relevant news during this period. If the result is positive, it is positive, and if it is negative, it is negative.
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Belief role
When it comes to cryptocurrencies, the most talked about word is belief, especially belief in Bitcoin. This comes from the freedom embodied in Bitcoin in the financial field and the openness embodied in tokens, so it is easy to drive many liberal believers to trust in cryptocurrency. According to statistics, in the cryptocurrency community, the proportion of liberal believers exceeds 30%, and other beliefs also have beliefs in technology and beliefs in the pursuit of wealth (because cryptocurrencies have created many rich people).
The pursuit of faith also determines the development performance of the cryptocurrency industry. From the perspective of industry structure, coins and chains represent the financial market and technology market respectively, and the financial market is most familiar with transactions in the secondary market and decentralized financial services. What we see most is transactions and currency speculation. In this system, faith, sometimes supporting wealth and hope, is also the ultimate support for prices. How to say it.
As attitudes change, what determines is behavior. If the price increase is to continue to rise, there must be enough momentum, that is, all prices will continue to exceed the highest price in mind, that is, the support level will continue to increase.
Behind that support, in fact, it is not selling coins, but buying again, and constantly eating the coins thrown by others. That also means that someone needs to continue to take over the order to support it, and the important thing is that someone will take over the order in the end.
Faith is the best reason for investors to take over. Therefore, belief seems to determine the secondary market, and it is also a soul vocabulary of cryptocurrency. But faith is not omnipotent. What determines the trend is the change in supply and demand, and what determines the price is market investors' estimation of the value of the currency. This is about the life cycle of coins.
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roadmap logic
In fact, the life cycle of a coin, if viewed in the form of a stock, is a clear dividing line between before listing and after listing. During the frenzy of coin issuance, most of the tokens are listed quickly, and an ERC20 protocol takes a few minutes. Complete the currency issuance and be compatible with the exchange’s wallet.
However, after the listing of the currency, all the currency and price are handed over to the changes in the secondary market, and sometimes all the liquidity pressure is piled up on the ecology. This situation has caused many tokens to face a catastrophe.
What I want to mention here is that before the mainnet goes live, the tokens we get are not the mainnet tokens. If the tokens we get are real, we can get them and map them after the mainnet goes live. This was the case with the original EOS, but this also means that the Ethereum protocol must be used first. This is not the case with Polkadot. KUSAMA, a test function, is launched first, and a KSM token is released to let everyone test the network, but KSM also has exchange value. At present, many Polkadot ecological project tokens can be locked and replaced with KSM. Polkadot’s DOT is currently only obtained through ecological rewards, and it is a DOT that has not yet been mapped. There are no real DOTs in circulation on other exchanges.
In the stage before listing, with the help of ecological routes and governance processes, more ecological people can hold tokens and use tokens, which means the cost of education and proficiency. When the mainnet is launched and tokens can be traded, the main function of tokens is not only the transaction in the secondary market, and its value will be less affected by the secondary market.
For example, some incentives distributed by Polkadot are KSM and DOT, but DOT needs to be mapped in the end, and KSM has to wait for the mainnet to go online before it can be listed. When many people hold it, if the use is greater than the realization, this is very effective for controlling circulation after listing. But how do you cash out if you hold tokens without selling them? This is what the project party should consider.
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Financial Rules and Technical Judgment
In addition to the flow of tokens, the project party is more important than the price, so the project party must understand the financial rules better. Today's tokens are also a financing method, from cornerstone, private placement, even public offering and even listing on the exchange. The supply of a token, the price of each stage, and the supply and demand of shipments are very important.
But it is also worth thinking about that during the continuous decline of 312, there was a huge liquidation of futures trading in the market, and the money that belonged to the flow in the market, after the liquidation, became short-selling income and platform handling fees. On the contrary, a rapid rise will also blow up the short-selling investment money in the futures. Pulling up the market requires a steady stream of capital inflows to support the price. The contract allows the market to bear a part of the mandatory loss at each price stage of the token price. Fortunately, the futures volume of ETH is still small.
Technically, ETH has no other chains that can compare with it. For several years, the Ethereum community is all HODL, and they are optimistic about ETH and its ecology regardless of losses. Now seven teams are working together to build Ethereum 2.0-related technologies, which is several times the size of other teams. Although the technical research and exploration progress has been procrastinating, at least we have seen a solid effort to do better for Ethereum. The appearance of development is not just appearance.
But the bearish thing is that investors have to evaluate ETH when its price changes and progress do not match. The biggest negative is the separation of investor expectations and reality, which leads investors to turn to other currencies for investment.
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From the news to see the truth
It's already mid-June. People in the industry are looking forward to the arrival of Eth2.0. People who are familiar with Ethereum and know the roadmap and progress will know that in the Eth2.0 phase, a new beacon chain phase 0 will start, and the staking of validators will start. This is The good part is that it has officially entered the state envisioned a few years ago.
But there is also that the chain at this time does not have other complete development functions, and it needs to start the first and second stages to successfully become a new development chain. When the 0 stage starts, it is still in the transition and trial stage, and there will be variables.
So if the market starts to go to war because of Ethereum 2.0, people will be optimistic during this cycle, and that is a market signal. But if the progress of Ethereum changes again, it is not certain whether the cycle of investors will continue.
As a matter of fact, two months ago, Vitalik and others mentioned the approximate launch date in the developer meeting, and then with the successive launch of several testnets, they showed good progress, but on the eve of the launch of the multi-client testnet , Vitalik said that he did not specify the launch date, and the multi-client test network will not be able to start phase 0 until it has been running for 8 weeks. The calculation date is about the end of July, and the time is almost the same. But yesterday, when the developer team of Ethereum participated in the AMA, it said that Ethereum 2.0 may be delayed to a few months.
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Data source: glassnode
From the above figure, the number of addresses holding more than 32 ETH has been increasing significantly. 32 ETH is the number of pledged tokens of validators in the Ethereum 2.0 chain. We see address growth, which largely shows Eth2. The progress of 0 validators is active and has not been greatly affected by price changes.
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However, as the number of holdings increases, the number of addresses holding a large amount of Ethereum is decreasing, which means that some Ethereum has been shipped, and a large number of long-term holders are decreasing. Investors do token storage. In addition to the token quota of the exchange, long-term bullish investors will store tokens in wallets instead of exchanges. This also represents a certain behavior trend of this type of users.
But trading is not terrible, because long-term investment will inevitably increase the liquidity of tokens. On the contrary, entering the market and raising tokens to exchanges also means that the current market can digest a large number of shipments. Compared with Deeper in earlier years.
As a public chain with outstanding financial value, the application data can also be seen.
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The public chain is the infrastructure of transactions, which means that the more transactions, the more applications behind it, and the more wallet activities, the higher the usage rate.
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write at the end
Data source: DeFiMarketCap
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