Is Ethereum finally “resurrected”? What opportunities are there for ambushes?

Ethereum Revenge succeeded.

This morning, ETH exceeded US$2,400. As of writing, the price was US$2,414, with a 24-hour increase of 8.47%. Meanwhile, Solanas price fell 15% from a high of $123 on December 26 to $104.

Between the rise and fall, the community shouted Ethereum is finally resurrected, and if Ethereum was given a script, the competition between it and its common rival Solana would definitely be the most talked about drama in the encryption field.

Reasons for the “resurrection” of the Ethereum ecosystem

At present, the encryption industry has entered a critical period of bull and bear alternation, and the market has gradually returned to caution from fanaticism and excitement.

Bull and bear cycles further alternate

It can be seen from the market sentiment index on the BlockBeats web page that since October, the news of the Bitcoin spot ETF has been gradually advanced, as well as the various protocols and inscriptions in the Bitcoin ecosystem, which have pulled the encryption market from the bottom of the bear market in 2023. Subsequently, multiple Public chains take on hot narratives and further boost market sentiment through inscriptions, memes, and NFTs. The entire crypto field believes that the bull market has begun.

However, during this process, the prices of the two mainstream tokens, Bitcoin and Ethereum, have maintained a range-bound trend. On the contrary, new gadgets in the ecosystem have achieved exaggerated price increases. For example, Ethereum Inscription ETHS once exceeded 16,000. The U.S. dollar was 6-7 times the price of Ethereum at that time, which shows the madness of the market.

However, as the growth rate of the inscription market, which is known as the starter of this bull market, has been weak, people have realized that the current value anchoring development of inscriptions is still immature. The entire crypto market is still in the transitional stage between bulls and bears. There have been short-term growth myths, and there will also be stagnant market performance. And every crypto project with a narrative and ecology will come out to increase its presence during this period. Therefore, , Ethereum’s price fluctuations are a normal response to this market stage.

On December 28, Grayscale officials posted on social media that ETH generated strong returns (more than 80%) in 2023, but its performance lagged behind BTC and certain other smart contract blockchain tokens. The ratio between the ETH and BTC price index recently reached its lowest level since mid-2021.

In fact, most smart contract platform tokens have gained less than Bitcoin this year, with ETH largely in line with this peer group. The CryptoSector Index is up about 94% in 2023, only slightly higher than ETH’s gain. Grayscale said, “While ETH lags behind Bitcoin and certain other crypto-assets in 2023, it still outperforms traditional asset classes. Therefore, we believe that ETH’s rebound should be viewed as evidence of a broadening cryptocurrency recovery.”

Solana Ecological Fund Return

Another factor that cannot be ignored in the rise in the price of Ethereum is the loss of funds faced by its rival Solana.

Last week, BitMEX founder Arthur Hayes claimed to have received divine revelation during meditation, instructing him to sell the SBF-backed token SOL and expressed his love for Ethereum founder Vitalik. The price of Ethereum briefly rose that day, but then the markets attention still remained on the Solana ecosystem.

During this period, the craze for meme coins such as BONK, WIF, and SILLY on the Solana chain allowed DEXs such as Raydium and Jupiter to obtain ultra-high returns. On December 16, the DEX transaction volume on the Solana network was approximately US$1.475 billion, surpassing the US$1.164 billion of the Ethereum network. The transaction volume for the week reached US$6.429 billion, an increase of 52.75%. This once became the reason why the community believed that Solana would filp Ethereum. Strong proof.

On December 26, according to DefiLlama data, Solana ecological DEX Raydium protocol fees reached US$161 million in the past seven days, surpassing Bitcoin network protocol fees (US$102 million) and Ethereum network protocol fees (US$76.59 million) to rank first. However, according to the latest data, Raydiums 7-day protocol fee has fallen to fifth place, and its high point has dropped by 70%.

Through the price changes of SOL, we can also see that Solanas strong performance is slowing down. Currently, SOLs market value ranking has dropped to fifth place, and its price has dropped from the high of $123 on December 26 to $103. up to 16%.

Price performance is always the most sensitive reflection of market conditions, and currently we are in an unstable bull-bear period. Hot money will always choose to lurk in places with more wealth opportunities, and Ethereum’s opportunities will be next year.

Cancun upgrade and ZK L2 airdrop expected

The Cancun upgrade is currently considered by the market to be an important node for the re-emergence of the Ethereum ecosystem. The Cancun upgrade is an additional upgrade to the ETH blockchain after the Shanghai upgrade. The highly anticipated EIP-4844 proposal will promote Ethereum L2 to achieve the goal of cost reduction and speed improvement. By then, the speed of Ethereum Layer 2 will be achieved. A 10-fold improvement, and even a 100-fold improvement at a lower cost.

Related Reading:How will the Layer 2 market structure evolve after Cancun is upgraded?》

The high gas fees of the Ethereum ecosystem have made many crypto users unable to bear it. If the Cancun upgrade can successfully reduce the cost of transactions on Ethereum, combined with the complete infrastructure of the Ethereum ecosystem, the price of Ethereum will rise at this time. It was the first shot that was expected to land.

This morning, Vitalik Buterin published an article on the Ethereum Research forum, proposing three methods to simplify the design of Ethereums proof of stake, including a decentralized pledge pool, two-tiered staking, and a validator committee mechanism.

Many people believe that this is a key factor in the rise in ETH prices this morning. In addition, Ethereum Layer 2 project tokens have also seen a general rise, and the total Layer 2 lock-up volume (TVL) has now reached the $20 billion mark. , an increase of 23.06% on the 7th.

The expected airdrops of Starknet and zkSync in the Layer 2 zk camp have also brought new attention to the Ethereum ecosystem. On December 1, the Starknet Foundation confirmed a screenshot showing the draft airdrop plan and stated that an airdrop snapshot has been taken . Previously, with the Layer 2 PUA remarks triggered by Blast, other Layer 2s in Ethereum realized that they must take action to avoid being abandoned by the market. Therefore, next year these Layer 2s with technology and airdrop expectations will form a consensus with Ethereum. market sentiment.

What potential opportunities are there?

Since the Ethereum ecosystem next year is so exciting, what opportunities can we wait for in advance?

OP Ecology

Optimism is the vanguard of this round of Ethereum ecological price recovery. On December 27, OP rose to US$4. The current price is US$3.84, continuing to hit a record high, and the 24-hour increase expanded to 18%.

OP Stack is the trump card of Optimism. It can be understood as a set of open source software components that allow anyone to use Optimistic rollups to build their own Layer 2 blockchain on top of Ethereum. It moves most of the computation and storage off-chain, while relying on Ethereum to ensure security and finality. From a technical perspective, Optimism is mainly reflected in the fact that it actually saves users a lot of on-chain fees.

Related Reading:Crazy multi-chain universe, crazy OP Stack》

Previously, more than ten projects such as opBNB, Zora, Base, Wordcoin, and DeBank announced to join the OP Stack camp. We can already see the popularity of Base from friend.tech, and projects with many user bases such as Wordcoin and DeBank may become more popular in the future. Get more market attention.

The OP ecological projects that currently attract high market attention include the AMM protocol Velodrome Finance and the lending protocol Sonne Finance. According to DeFiLlama data, Velodrome V2 TVL is currently US$150 million and Sonne TVL is US$48.87 million, both of which have increased in the past seven days. According to CoinGecko data, the current price of Velodromes native token VELO is US$0.076, with a 7-day increase of 69.9%, and the market value ranks 699th; the current price of Sonnes native token SONNE is US$0.1, with a 7-day increase of 60.8%, and the market value ranks 1369th.

In addition, the meme coins on OP are also worthy of attention. TUX, which is the most popular in the community, claims to be the first optimistic cat. According to DEXSCREENER data, the current price is US$0.005601, with a 24-hour increase of 204%.

ARB Ecology

Today, Vitalik posted on Warpcast, I am very happy to see that a Rollup has entered the first phase this year (and several projects are very close to the first phase). This is real decentralization progress, and I hope to see it next year. Ten Rollups have entered the first stage and achieved a certain degree of sequencer decentralization.” From the screenshot posted by Vitalik, we can see that the Rollup he is referring to entering the first stage is Arbitrum.

According to Vitaliks preliminary proposal in the Ethereum Magicians forum and the definition of Rollups phased development subsequently summarized by L 2b eat, compared to the zero phase, the first phase of Rollup must meet five conditions:

• Deployed a complete and fully functional proof system;

• At least 5 external parties can submit proof of fraud;

• Users can exit without assistance from an authorized operator;

• If an unnecessary upgrade is implemented by a more centralized actor than the Security Council, users will have at least 7 days to log out;

• The Security Council is well established.

As the leader of Layer 2, Arbitrum is the first project actively mentioned by Vitalik at this node. It is an ecosystem worthy of focus. The price of Arbitrum has also responded well to the market. As of press time, the ARB price is 1.63 The US dollar rose 19.61% in 24 hours.

The Arbitrum ecosystem has always been considered the most active existence in Layer 2. Crypto KOL Blue Fox Notes pointed out today that with the large-scale reduction in costs after the Cancun upgrade, Arbitrum will gradually evolve into Web3 games, social and other applications. Important town.

The xpet that has taken the Twitter comment area by storm recently is xPET, a social mini-game on Arbitrum. Recently, xPET officially updated its white paper and introduced PVE\PVP and other functions. The game ecology is gradually enriching, and the price of its token XPET has also hit new highs. The current price is $2.47, a 24-hour increase of 93%.

Metis Ecology

In addition to Arbitrum, there is also Layer 2 Metis whose price and TVL have increased astonishingly recently.

On December 18, the MetisDAO Foundation announced the creation of a fund of approximately US$100 million to accelerate the growth of its ecosystem. The fund, called the Metis Ecosystem Development Fund, will allocate 4.6 million METIS tokens for sequencer mining, retroactive funding, deployment of new projects and other efforts. In addition, according to the official blog post, Metis is expected to become the first Optimistic Rollup of the decentralized sorter early next year, and the distribution of the Metis Ecological Development Fund will take place one week after the Metis decentralized sorter goes online.

Crypto researcher HaoTian believes that the core business logic of Metis is very simple. Since OP-Rollup has stalled on the issue of sequencer decentralization, as a successor, it is its market space to propose a reasonable decentralized sequencer solution. Therefore, the performance of Metis next year is also worth looking forward to.

The most popular projects in the Metis ecosystem recently are Hummus and the meme currency project VMUM. The Hummus protocol is a unilateral AMM built on Metis that allows users to exchange stablecoins with extremely low losses. Its native token is HUM. Users can stake stablecoins to earn HUM and use the staked HUM rewards to increase the income from staking stablecoins. VMUM is a meme coin named Vitalik Mother, which was deployed on December 19.

Related Reading:With a price increase of over 190% in one week, what are the potential projects worthy of attention in the Metis ecosystem?》

On December 5, Bankless founder Ryan Sean Adams posted a long post on social platforms stating: Some people say that the price of ETH is as high as $2,200, which is really funny...ETH has not yet entered the bull market. At the same time, , he pointed out that the fundamentals of Ethereum are strong, but the current Ethereum has not yet exerted its true value.

This statement triggered a wave of Ethereum debate in the encryption community at the time. Looking back now, the focus of the debate may get a clearer answer next year. To talk about Ethereum’s revenge, it would be better to say that nothing has changed in Ethereum, only the market has changed.