ETH in 2017 and ETH in 2021
Editor's Note: This article comes fromBlue Fox Notes (ID: lanhubiji), reprinted by Odaily with authorization.
Editor's Note: This article comes fromBlue Fox Notes (ID: lanhubiji)》、《Blue Fox Notes (ID: lanhubiji)》、《, reprinted by Odaily with authorization.》。
Four years is an important cycle in the crypto world, defined by Bitcoin's halving. Today, this cycle effect is still an important MEME in the field of encryption, and it still affects people's decision-making. Regarding this aspect, you can refer to the previous article of Blue Fox Notes "
Encryption cycle and value flow
How to understand the market cyclicality of cryptocurrencies
The halving effect of Bitcoin and the pledge effect of ETH2.0
Today we are talking about the changes of ETH in this four-year cycle. ETH is the native token of Ethereum, and ETH in 2017 and ETH in 2021 are undergoing qualitative changes.
From Sowing to Harvesting
In 2017, Ethereum basically had no substantive ecology. In 2017, Ethereum was popular with initial coin offerings. The primary use case for Ethereum at the time was financing initial coin offerings. At that time, almost most projects were just concepts, and people invested or speculated on concepts. And this kind of bubble comes quickly, but it also goes turbulently.
Of course, the 2017 bubble wasn't all bad. The bull market in 2017 made many people see the potential of blockchain and Ethereum, and saw opportunities for other blockchains besides Bitcoin. At the same time, during this period, some projects obtained financing and persisted, laying the foundation for the future ecological prosperity of Ethereum. Many projects such as Chainlink, Aave, MakerDAO, Kyber, Loopring, etc. received development funds during that period.
Therefore, around 2017 is the seeding stage of the Ethereum ecosystem. In the frenzied bubble, most projects vanished into thin air, but there were some excellent teams that planted seeds on the ground of Ethereum and began to take root.
Because there was no actual value support for the Ethereum ecology at that time, after the frenzied ICO bubble subsided, a large-scale decline ensued.
After several years of exploration, today's ETH has a solid ecological support. The biggest support is the formation of the DeFi ecosystem. At present, the overall DeFi market value exceeds 16 billion US dollars, and some agreements have a certain scale of users, transaction volume and fee income. As for ETH itself, most DeFi protocols have locked ETH of different sizes, and ETH has transformed from a financing medium to an underlying value asset.
Now DeFi has a strong demand for ETH:
A large amount of ETH is locked in DeFi, reaching 6.6 million, according to the current value of more than 3.4 billion US dollars. Except for Ethereum, the overall locked assets of DeFi are 12.8 billion US dollars.
DeFi is forming an increasing demand for ETH. On Unswap, ETH (WETH) is the most liquid, and ETH is still the most trading volume. As DeFi develops in depth, such as decentralized options, etc., the demand for ETH in DeFi will only increase.
*Users of the DeFi ecosystem
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(DeFi users are about to exceed one million, DuneAnalytics)
*DeFi-driven transaction fees on Ethereum
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(Ethereum’s annualized capture fee is as high as $760 million, Tokenterminal)
Due to the booming DeFi on Ethereum, it forms a siphon to various other assets. These include Bitcoin, the number one player in the crypto space. Today there are more than 150,000 BTCs in circulation on Ethereum, worth more than $2.6 billion, and this is just the beginning.
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(There are more than 150,000 BTC in circulation on Ethereum, BTCONETHEREUM)
In addition, there are more than $16 billion in stablecoins in circulation on Ethereum.
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With more and more Ethereum DeFi protocols, better liquidity and stronger security, it will also siphon more Bitcoin and stable coins, and with the development of Layer 2, DeFi can accommodate a larger amount , which will create a greater demand for ETH and other assets.
*DeFi forms a substantial competition to CeFi
Today's DeFi is increasingly becoming the real opponent of CeFi, which is first shown in the trading field. Today, the total transaction volume of DEX since this year has reached 89 billion U.S. dollars, and the transaction volume in the past week has exceeded 5 billion U.S. dollars. Although there is still a long way to go compared with CEX, this trend of competition has already emerged.
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(The more eth locked on DeFi, the less eth on CEX, one trades off, glassnode)
In terms of encrypted lending, Compound currently has locked assets of up to US$1.5 billion, and Aave has locked assets of US$1.35 billion, of which 1.1 million and 392,000 ETHs have been locked respectively. In addition, in terms of derivatives, Synthetix and UMA are continuing, as well as Hegic's decentralized options; Cover, Nsure, and NXM in the insurance field are developing; YFI in the aggregated mining field is evolving rapidly, and various DeFi products are constantly being launched; even There is also a combination of NFT and DeFi, such as MEME and so on.
The prosperity of the DeFi ecosystem has promoted the evolution of Ethereum, making ETH gradually become the most important underlying asset in the DeFi field. From this perspective, ETH has gradually evolved from a financing tool in 2017 to an underlying asset with substantial sustainable demand.
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(The liquidity and trading volume of ETH on Uniswap rank first, Uniswap)
From Crypto Commodities to Productive AssetsIt is often said that BTC is digital gold and ETH is digital oil. If you go back to 2017, ETH is a misnomer. But now, ETH has gradually evolved into different encrypted asset characteristics from BTC. This may give it a chance to become the king of encrypted public chains in the future.》。
For now, BTC is the only one in the encrypted world, and its status cannot be shaken. Because it has few competitors in the store of value space. Due to its extensive social consensus, PoW mechanism, non-increasing hard cap, security and many other features, Bitcoin has gradually become digital gold and gradually expanded its advantages in the field of value storage. In the field of digital currency, BTC can hardly find any rivals.
But the real opponents come from a different field. Ethereum is a smart contract platform. It did not intend to become a cryptocurrency (coin) at the beginning, but more of a token, serving the original dream of the world computer. But today, the settlement that occurs on Ethereum is almost the same as that of Bitcoin. Ethereum has accidentally become a world settlement layer that is no less than Bitcoin and may even surpass Bitcoin in the future.
